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ITW beat Q4 estimates as adjusted EPS rose 7% and revenues grew 4%, aided by FX and acquisitions.
Illinois Tool lifted operating margin to 26.5%, up 30 bps, with enterprise initiatives adding 140 bps.
ITW guides 2026 EPS of $11.00-$11.40, sees 24% revenue growth, over 100% FCF and $1.5B buybacks.
Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2025 adjusted earnings of $2.72 per share, which surpassed the Zacks Consensus Estimate of $2.68. Earnings increased 7% year over year.
Illinois Tool’s revenues of $4.09 billion beat the consensus estimate of $4.07 billion. The top line increased 4% year over year, driven by a favorable foreign currency translation of 2.5%. Organic sales increased 1.3% in the quarter, while acquisitions had a favorable impact of 0.3%.
In 2025, ITW reported net revenues of $16 billion, which increased 0.9% year over year. However, the company’s adjusted earnings were $10.49 per share, down 10.4% year over year.
ITW’s Segmental Performance
Test & Measurement and Electronics’ revenues were $789 million, up 6% year over year. Our estimate for segmental revenues was $758.6 million. Revenues from Automotive Original Equipment Manufacturer increased 6% year over year to $827 million. Our estimate for segmental revenues was $842.5 million.
Food Equipment generated revenues of $698 million, up 4% year over year. Our estimate for segmental revenues was $690.5 million. Welding revenues were $462 million, up 3% year over year. Our estimate for segmental revenues was $468.3 million.
Construction Products’ revenues were down 2% year over year to $431 million. Our estimate for segmental revenues was $437.6 million. Revenues of $433 million from Specialty Products reflected an increase of 4% year over year. Our estimate for segmental revenues was $450.3 million. Polymers & Fluids’ revenues of $457 million increased 7% year over year. Our estimate for segmental revenues was $438.7 million.
Illinois Tool Works Inc. Price, Consensus and EPS Surprise
Illinois Tool’s cost of sales increased 2.8% year over year to $2.28 billion. Selling, administrative and research and development expenses increased 7.5% year over year to $704 million. The operating margin was 26.5%, up 30 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 140 bps to the operating margin.
ITW’s Balance Sheet and Cash Flow
At the end of the fourth quarter, Illinois Tool had cash and equivalents of $851 million compared with $948 million at the end of December 2024. Long-term debt was $6.68 billion compared with $6.31 billion at the end of December 2024.
In 2025, Illinois Tool generated net cash of $3.13 billion from operating activities, reflecting a decrease of 4.7% from the year-ago number. Capital spending on the purchase of plant and equipment was $419 million, down 4.1% year over year. Free cash flow was $2.71 billion, down 4.8% year over year.
Illinois Tool’s 2026 Guidance
Illinois Tool issued its full-year 2026 financial guidance. ITW expects earnings to be in the range of $11.00 - $11.40 per share. Revenues are expected to increase 2-4% while organic revenues are anticipated to rise 1-3%. Operating margin is expected to be 26.5–27.5%. Enterprise initiatives are expected to contribute approximately 100 bps to the operating margin.
Illinois Tool projects the free cash flow to be more than 100% of its net income. The company expects to repurchase about $1.5 billion worth of shares. The effective tax rate is expected to be 23.5-24.5%.
ITW’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
Graco Inc. (GGG - Free Report) posted quarterly earnings of 77 cents per share in the fourth quarter of 2025, in line with the Zacks Consensus Estimate. This compares with earnings of $0.64 per share a year ago.
Graco posted revenues of $593.2 million for the quarter, surpassing the Zacks Consensus Estimate by 1.39%. This compares with year-ago revenues of $548.67 million.
Baker Hughes Company (BKR - Free Report) reported fourth-quarter 2025 adjusted earnings of 78 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also increased from the year-ago level of 70 cents.
Total quarterly revenues of $7,386 million beat the Zacks Consensus Estimate of $7,056 million. The top line also increased from the year-ago quarter’s $7,364 million.
3M Company (MMM - Free Report) delivered adjusted earnings of $1.83 per share in the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.82. The company reported earnings of $1.68 per share in the year-ago quarter.
MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.08 billion. On an adjusted basis, organic revenues increased 2.2% year over year.
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Illinois Tool Surpasses Q4 Earnings Estimates, Issues 2026 View
Key Takeaways
Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2025 adjusted earnings of $2.72 per share, which surpassed the Zacks Consensus Estimate of $2.68. Earnings increased 7% year over year.
Illinois Tool’s revenues of $4.09 billion beat the consensus estimate of $4.07 billion. The top line increased 4% year over year, driven by a favorable foreign currency translation of 2.5%. Organic sales increased 1.3% in the quarter, while acquisitions had a favorable impact of 0.3%.
In 2025, ITW reported net revenues of $16 billion, which increased 0.9% year over year. However, the company’s adjusted earnings were $10.49 per share, down 10.4% year over year.
ITW’s Segmental Performance
Test & Measurement and Electronics’ revenues were $789 million, up 6% year over year. Our estimate for segmental revenues was $758.6 million. Revenues from Automotive Original Equipment Manufacturer increased 6% year over year to $827 million. Our estimate for segmental revenues was $842.5 million.
Food Equipment generated revenues of $698 million, up 4% year over year. Our estimate for segmental revenues was $690.5 million. Welding revenues were $462 million, up 3% year over year. Our estimate for segmental revenues was $468.3 million.
Construction Products’ revenues were down 2% year over year to $431 million. Our estimate for segmental revenues was $437.6 million. Revenues of $433 million from Specialty Products reflected an increase of 4% year over year. Our estimate for segmental revenues was $450.3 million. Polymers & Fluids’ revenues of $457 million increased 7% year over year. Our estimate for segmental revenues was $438.7 million.
Illinois Tool Works Inc. Price, Consensus and EPS Surprise
Illinois Tool Works Inc. price-consensus-eps-surprise-chart | Illinois Tool Works Inc. Quote
Illinois Tool’s Margin Profile
Illinois Tool’s cost of sales increased 2.8% year over year to $2.28 billion. Selling, administrative and research and development expenses increased 7.5% year over year to $704 million. The operating margin was 26.5%, up 30 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 140 bps to the operating margin.
ITW’s Balance Sheet and Cash Flow
At the end of the fourth quarter, Illinois Tool had cash and equivalents of $851 million compared with $948 million at the end of December 2024. Long-term debt was $6.68 billion compared with $6.31 billion at the end of December 2024.
In 2025, Illinois Tool generated net cash of $3.13 billion from operating activities, reflecting a decrease of 4.7% from the year-ago number. Capital spending on the purchase of plant and equipment was $419 million, down 4.1% year over year. Free cash flow was $2.71 billion, down 4.8% year over year.
Illinois Tool’s 2026 Guidance
Illinois Tool issued its full-year 2026 financial guidance. ITW expects earnings to be in the range of $11.00 - $11.40 per share. Revenues are expected to increase 2-4% while organic revenues are anticipated to rise 1-3%. Operating margin is expected to be 26.5–27.5%. Enterprise initiatives are expected to contribute approximately 100 bps to the operating margin.
Illinois Tool projects the free cash flow to be more than 100% of its net income. The company expects to repurchase about $1.5 billion worth of shares. The effective tax rate is expected to be 23.5-24.5%.
ITW’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
Graco Inc. (GGG - Free Report) posted quarterly earnings of 77 cents per share in the fourth quarter of 2025, in line with the Zacks Consensus Estimate. This compares with earnings of $0.64 per share a year ago.
Graco posted revenues of $593.2 million for the quarter, surpassing the Zacks Consensus Estimate by 1.39%. This compares with year-ago revenues of $548.67 million.
Baker Hughes Company (BKR - Free Report) reported fourth-quarter 2025 adjusted earnings of 78 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also increased from the year-ago level of 70 cents.
Total quarterly revenues of $7,386 million beat the Zacks Consensus Estimate of $7,056 million. The top line also increased from the year-ago quarter’s $7,364 million.
3M Company (MMM - Free Report) delivered adjusted earnings of $1.83 per share in the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.82. The company reported earnings of $1.68 per share in the year-ago quarter.
MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.08 billion. On an adjusted basis, organic revenues increased 2.2% year over year.