Illinois Tool Works Inc
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +5.69%.
Did ITW Beat Earnings? Q1 2026 Results
Illinois Tool Works kicked off 2026 on firm footing, posting first-quarter earnings per share of $2.66 against a consensus estimate of $2.56, a beat of 3.72% that extends the industrial conglomerate's streak of topping Wall Street EPS expectations to four consecutive quarters. Revenue climbed 4.6% year-over-year to $4.02 billion, edging past the $4.01 billion consensus, with foreign currency translation contributing 3.9% of that gain alongside modest organic growth of 0.4%. The headline profit figure was further supported by a $34.00 million discrete tax benefit tied to the resolution of a U.S. tax audit, which pulled the effective tax rate to 20.6% versus an adjusted 24.1%, while enterprise initiatives drove 120 basis points of margin improvement, lifting operating margin 60 basis points to 25.4%. Welding was a standout segment, delivering 6.0% organic growth and a leading operating margin of 32.1%. On the strength of the quarter, ITW raised its full-year 2026 GAAP EPS guidance by $0.10 to a range of $11.10 to $11.50, representing approximately 8% growth at the midpoint, while maintaining its revenue growth projection of 2-4%.
- Enterprise initiatives contributed 120 basis points to operating margin expansion
- Positive demand trends in capex-related segments, led by Welding (6% organic growth) and Test & Measurement and Electronics (4.6% organic growth)
- Favorable foreign currency translation increased revenue by 3.9%
- Discrete tax benefit of $34 million from resolution of U.S. tax audit lowered effective tax rate to 20.6%
- Organic revenue growth of 0.4% at the total company level
“ITW delivered a solid start to the year, marked by five percent revenue growth, margin expansion of 60 basis points to 25.4 percent, and a 12 percent increase in GAAP earnings per share to $2.66. Positive demand trends continued in our capex-related segments, led by Welding and Test & Measurement and Electronics, which delivered organic growth of six percent and five percent, respectively, this quarter.”
Illinois Tool Works CEO, on the earnings call
Forward Guidance & Outlook
ITW raised its full-year 2026 GAAP EPS guidance by $0.10 to a range of $11.10 to $11.50 per share, representing approximately 8% growth at the midpoint. The company continues to project total revenue growth of 2-4% and organic growth of 1-3% based on current demand levels and prevailing foreign exchange rates. All seven segments are expected to deliver both positive organic growth and operating margin expansion. Full-year operating margin is projected at 26.5-27.5%, an improvement of approximately 100 basis points year-over-year driven by enterprise initiatives. Free cash flow is projected to exceed 100% of net income. The company expects to repurchase approximately $1.5 billion of its own shares, with a projected effective tax rate of 23-24%.
ITW YoY Financials
ITW Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.