Illinois Tool Tops Q2 Earnings Estimates, Raises 2025 View

Illinois Tool Works Inc. ITW reported second-quarter 2025 adjusted earnings of $2.58 per share, which surpassed the Zacks Consensus Estimate of $2.56. Earnings increased 1.6% year over year.

Illinois Tool’s revenues of $4.05 billion beat the consensus estimate of $4.01 billion. The top line increased 1% year over year, driven by a favorable foreign currency translation of 1%. Organic sales were flat in the quarter.

ITW’s Segmental Performance

Test & Measurement and Electronics’ revenues were up 1.2% year over year to $686 million. Our estimate for segmental revenues was $670.4 million. Revenues from Automotive Original Equipment Manufacturer increased 3.8% year over year to $845 million. Our estimate for segmental revenues was $795.8 million.

Food Equipment generated revenues of $680 million, up 2.1% year over year. Our estimate for segmental revenues was $668.8 million. Welding revenues were $479 million, up 2.9% year over year. Our estimate for segmental revenues was $465.3 million.

Construction Products’ revenues were down 6.1% year over year to $473 million. Our estimate for segmental revenues was $502.4 million. Revenues of $455 million from Specialty Products reflected an increase of 1.1% year over year. Our estimate for segmental revenues was $448.2 million. Polymers & Fluids’ revenues of $438 million declined 3.4% year over year. Our estimate for segmental revenues was $446.3 million.

Illinois Tool’s Margin Profile

Illinois Tool’s cost of sales increased 0.4% year over year to $2.27 billion. Selling, administrative and research and development expenses increased 1% year over year to $693 million. The operating margin was 26.3%, up 10 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 second quarter, Illinois Tool had cash and equivalents of $788 million compared with $948 million at the end of December 2024. Long-term debt was $7.7 billion compared with $6.31 billion at the end of December 2024.

In the first six months of 2025, Illinois Tool generated net cash of $1.14 billion from operating activities, reflecting a decrease of 10.5% from the year-ago number. Capital spending on the purchase of plant and equipment was $197 million, down 6.6% year over year. Free cash flow was $945 million, down 11.1% year over year.

Illinois Tool’s 2025 Guidance

Illinois Tool raised its full-year 2025 financial guidance. ITW expects earnings to be in the range of $10.35-$10.55 per share compared with $10.15-$10.55 expected earlier. Revenues are expected to increase 1-3% while organic revenues are anticipated to increase 0-2%. Operating margin is expected to be 26–27%. 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 around 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

Dover Corporation DOV reported earnings of $2.44 per share in second-quarter 2025, beating the Zacks Consensus Estimate of $2.39. This compares with earnings of $2.36 per share a year ago.

Dover posted revenues of $2.05 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $2.18 billion.

Teck Resources Limited TECK came out with earnings of $0.27 per share in the second quarter of 2025, beating the Zacks Consensus Estimate of $0.2. This compares with earnings of $0.58 per share a year ago.

Teck Resources posted revenues of $1.46 billion in the quarter, missing the Zacks Consensus Estimate by 8.7%. This compares with year-ago revenues of $2.83 billion. 

Packaging Corporation of America PKG reported earnings of $2.48 per share, beating the Zacks Consensus Estimate of $2.44. This compares with earnings of $2.2 per share a year ago.

Packaging Corp. posted revenues of $2.17 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.5%. This compares with year-ago revenues of $2.08 billion.

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