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ITW Q3 Earnings Beat Estimates on Electronics Strength
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Key Takeaways
ITW's Q3 EPS rose 6.8% year over year to $3.00, beating estimates, while revenues grew 4.4%.
Test & Measurement and Electronics sales surged 17.3%, while operating margin expanded 40 basis points.
ITW raised 2026 EPS guidance to $11.45-$11.55 and expects revenue growth of 4.5-5.5%.
Illinois Tool Works Inc. (ITW - Free Report) reported third-quarter 2026 earnings of $3.00 per share, which surpassed the Zacks Consensus Estimate of $2.99. Earnings increased 6.8% year over year.
Illinois Tool’s revenues of $4.24 billion missed the consensus estimate of $4.26 billion. The top line increased 4.4% year over year, driven by organic sales growth of 3.8%. Favorable foreign currency translation and acquisitions each had a positive impact of 0.3% in the quarter.
ITW’s Segmental Revenue Trends
Test & Measurement and Electronics’ revenues were $819 million, up 17.3% year over year. Revenues from Automotive Original Equipment Manufacturer decreased 1.8% year over year to $814 million.
Food Equipment generated revenues of $698 million, up 0.7% year over year. Welding revenues were $513 million, up 7.3% year over year.
Construction Products’ revenues remained flat year over year at $472 million. Revenues of $447 million from Specialty Products reflected a decline of 1.1% year over year. Polymers & Fluids’ revenues of $477 million increased 8.1% year over year.
Illinois Tool Works Inc. Price, Consensus and EPS Surprise
Illinois Tool’s cost of sales increased 3.2% year over year to $2.33 billion. Selling, administrative and research and development expenses increased 6.1% year over year to $717 million. The operating margin was 27.8%, up 40 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 130 bps to the operating margin.
ITW’s Balance Sheet and Cash Flow
At the end of the third quarter, Illinois Tool had cash and equivalents of $809 million compared with $851 million at the end of December 2025. Long-term debt was $7.15 billion compared with $6.68 billion at the end of December 2025.
In the third quarter of 2026, Illinois Tool generated net cash of $953 million from operating activities, reflecting a decrease of 6.7% from the year-ago number. Capital spending on the purchase of plant and equipment was $102 million, down 12.8% year over year. Free cash flow was $851 million, down 5.9% year over year.
Illinois Tool’s 2026 Guidance
Illinois Tool raised its full-year 2026 financial guidance. ITW now expects earnings to be in the range of $11.45-$11.55 per share compared with $11.35-$11.55 expected earlier. Revenues are expected to increase 4.5-5.5% while organic revenues are anticipated to rise 3-4%. Operating margin is expected to be 26.5-27.5%. Enterprise initiatives are expected to contribute more than 100 bps to the operating margin.
Illinois Tool projects free cash flow to be approximately 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 23-24%.
ITW’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
In the third quarter of 2026, Graco Inc. (GGG - Free Report) came out with quarterly earnings of $0.81 per share, missing the Zacks Consensus Estimate of $0.82 per share. This compares to earnings of $0.73 per share a year ago.
Graco revenues of $586.39 million in the quarter ended September 2026, missing the Zacks Consensus Estimate by 0.58%. This compares to year-ago revenues of $543.36 million.
Dover Corporation (DOV - Free Report) has reported third-quarter 2026 adjusted earnings of $2.88 per share, rising 10% year over year and beating the Zacks Consensus Estimate of $2.83 by 1.77%. The improvement reflected broad-based demand, higher revenues and operational execution.
Revenues increased 7.5% year over year to $2.23 billion, beating the Zacks Consensus Estimate of $2.20 billion by 1.47%. Organic revenues grew 7.1%. Our model expected organic revenues to rise 4%.
Allegion plc (ALLE - Free Report) reported third-quarter 2026 adjusted earnings of $2.60 per share, up 13% year over year. The figure beat the Zacks Consensus Estimate of $2.49 by 4.4%, supported by strong organic growth and margin expansion.
Revenues increased 9.6% year over year to $1.17 billion, beating the Zacks Consensus Estimate of $1.13 billion by 3.4%. Organic revenues grew 7.2%, driven by strength in the Americas non-residential business, volume growth and price realization.
View the Zacks #1 Rank List
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ITW Q3 Earnings Beat Estimates on Electronics Strength
Key Takeaways
Illinois Tool Works Inc. (ITW - Free Report) reported third-quarter 2026 earnings of $3.00 per share, which surpassed the Zacks Consensus Estimate of $2.99. Earnings increased 6.8% year over year.
Illinois Tool’s revenues of $4.24 billion missed the consensus estimate of $4.26 billion. The top line increased 4.4% year over year, driven by organic sales growth of 3.8%. Favorable foreign currency translation and acquisitions each had a positive impact of 0.3% in the quarter.
ITW’s Segmental Revenue Trends
Test & Measurement and Electronics’ revenues were $819 million, up 17.3% year over year. Revenues from Automotive Original Equipment Manufacturer decreased 1.8% year over year to $814 million.
Food Equipment generated revenues of $698 million, up 0.7% year over year. Welding revenues were $513 million, up 7.3% year over year.
Construction Products’ revenues remained flat year over year at $472 million. Revenues of $447 million from Specialty Products reflected a decline of 1.1% year over year. Polymers & Fluids’ revenues of $477 million increased 8.1% year over year.
Illinois Tool Works Inc. Price, Consensus and EPS Surprise
Illinois Tool Works Inc. price-consensus-eps-surprise-chart | Illinois Tool Works Inc. Quote
ITW’s Costs and Margin Expansion
Illinois Tool’s cost of sales increased 3.2% year over year to $2.33 billion. Selling, administrative and research and development expenses increased 6.1% year over year to $717 million. The operating margin was 27.8%, up 40 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 130 bps to the operating margin.
ITW’s Balance Sheet and Cash Flow
At the end of the third quarter, Illinois Tool had cash and equivalents of $809 million compared with $851 million at the end of December 2025. Long-term debt was $7.15 billion compared with $6.68 billion at the end of December 2025.
In the third quarter of 2026, Illinois Tool generated net cash of $953 million from operating activities, reflecting a decrease of 6.7% from the year-ago number. Capital spending on the purchase of plant and equipment was $102 million, down 12.8% year over year. Free cash flow was $851 million, down 5.9% year over year.
Illinois Tool’s 2026 Guidance
Illinois Tool raised its full-year 2026 financial guidance. ITW now expects earnings to be in the range of $11.45-$11.55 per share compared with $11.35-$11.55 expected earlier. Revenues are expected to increase 4.5-5.5% while organic revenues are anticipated to rise 3-4%. Operating margin is expected to be 26.5-27.5%. Enterprise initiatives are expected to contribute more than 100 bps to the operating margin.
Illinois Tool projects free cash flow to be approximately 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 23-24%.
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
In the third quarter of 2026, Graco Inc. (GGG - Free Report) came out with quarterly earnings of $0.81 per share, missing the Zacks Consensus Estimate of $0.82 per share. This compares to earnings of $0.73 per share a year ago.
Graco revenues of $586.39 million in the quarter ended September 2026, missing the Zacks Consensus Estimate by 0.58%. This compares to year-ago revenues of $543.36 million.
Dover Corporation (DOV - Free Report) has reported third-quarter 2026 adjusted earnings of $2.88 per share, rising 10% year over year and beating the Zacks Consensus Estimate of $2.83 by 1.77%. The improvement reflected broad-based demand, higher revenues and operational execution.
Revenues increased 7.5% year over year to $2.23 billion, beating the Zacks Consensus Estimate of $2.20 billion by 1.47%. Organic revenues grew 7.1%. Our model expected organic revenues to rise 4%.
Allegion plc (ALLE - Free Report) reported third-quarter 2026 adjusted earnings of $2.60 per share, up 13% year over year. The figure beat the Zacks Consensus Estimate of $2.49 by 4.4%, supported by strong organic growth and margin expansion.
Revenues increased 9.6% year over year to $1.17 billion, beating the Zacks Consensus Estimate of $1.13 billion by 3.4%. Organic revenues grew 7.2%, driven by strength in the Americas non-residential business, volume growth and price realization.