Highlights

  • Third quarter 2026 revenue was $4.24 billion, an increase of 4.4 percent, with organic revenue growth of 3.8 percent.
  • GAAP EPS was $3.00, up 6.8 percent, and operating income was $1.18 billion at an operating margin of 27.8 percent.
  • Tornado damage to two Welding facilities in late July reduced third quarter revenue by an estimated $40 million.
  • ITW raised full year 2026 GAAP EPS guidance to a narrowed range of $11.45 to $11.55 per share.

Illinois Tool Works Inc. (NYSE: ITW) shares were trading at USD 274.17 on October 27, 2026, down 0.74%, with a relative volume at time of 2.91. The manufacturer raised its dividend 7 percent during the third quarter, reported tornado damage to two Welding facilities in late July, and on October 27 reported third quarter 2026 results and raised its full year 2026 guidance.

Illinois Tool Works is a Delaware corporation with principal executive offices at 155 Harlem Avenue in Glenview, Illinois. Founded in 1912, it is a global multi-industry manufacturer that reported revenue of $16 billion in 2025. It operates seven segments: Automotive OEM, Food Equipment, Test & Measurement and Electronics, Welding, Polymers & Fluids, Construction Products and Specialty Products. The release states that ITW has approximately 43,000 colleagues around the world. Its most recent annual report covers the fiscal year ended December 31, 2025.

Third Quarter 2026 Results

Revenue was $4,236 million, against $4,059 million a year earlier. Organic revenue growth was 3.8 percent, led by 6.0 percent growth in North America. Foreign currency translation added 0.3 percent and an acquisition added 0.3 percent. Net income was $855 million, against $821 million, and diluted earnings per share were $3.00, against $2.81.

Operating income was $1,177 million, and operating margin expanded 40 basis points to 27.8 percent, with enterprise initiatives contributing 130 basis points. The company said price increases and other actions more than offset rising raw material costs. The effective tax rate was 24.4 percent.

By segment, Test & Measurement and Electronics revenue was $819 million with organic growth of 15.8 percent, and Welding revenue was $513 million with organic growth of 6.9 percent. Automotive OEM revenue was $814 million, with organic revenue down 2.1 percent and operating margin of 20.1 percent, down 170 basis points. Construction Products organic revenue declined 0.8 percent and Specialty Products declined 1.2 percent.

The tornado reduced third quarter revenue by an estimated $40 million. The company estimated that Welding organic growth would have been approximately 15 percent without it, and said the associated loss of operating income was largely offset by business interruption insurance. It expects the impact going forward to be immaterial.

Cash Flow, Balance Sheet and Capital Returns

Operating cash flow was $953 million and free cash flow was $851 million, a conversion of 100 percent of net income. The company repurchased $187 million of its shares in the quarter and raised its dividend 7 percent, bringing the annualized payout to $6.88 per share, the 63rd consecutive year of dividend increases. At September 30, 2026, cash and equivalents were $809 million, short-term debt was $2,219 million and long-term debt was $7,153 million. Total stockholders' equity was $3,142 million, against $3,226 million at December 31, 2025.

For the first nine months, revenue was $12,553 million, net income was $2,438 million and diluted earnings per share were $8.49.

2026 Guidance

ITW raised full year 2026 GAAP EPS guidance by $0.05 at the midpoint to a narrowed range of $11.45 to $11.55 per share. It raised revenue growth guidance to 4.5 to 5.5 percent and reaffirmed organic growth guidance of 3 to 4 percent. Operating margin is projected at 26.5 to 27.5 percent, free cash flow at approximately 100 percent of net income, and share repurchases at approximately $1.5 billion. The projected effective tax rate is 23 to 24 percent. On the call, management said it expects fourth quarter operating margin in the mid to high 27s. These statements are forward looking and subject to risks and uncertainties.