Illinois Tool Gears Up to Report Q1 Earnings: What to Expect

Illinois Tool Works Inc. ITW is scheduled to release first-quarter 2025 results on April 30, before market open.

The Zacks Consensus Estimate for first-quarter earnings has increased a penny in the past 60 days. The company has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters. The average surprise was 3.6%.

The consensus estimate for revenues is pegged at $3.84 billion, down 3.3% from the year-ago quarter’s figure. The consensus estimate for adjusted earnings is pinned at $2.34 per share, indicating a 4.1% decrease from the year-ago quarter’s number. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Let’s see how things have shaped up for Illinois Tool this earnings season.

Factors to Note Ahead of ITW’s Results

Recovery in the MTS Test & Simulation business and the consumable semiconductor end market is likely to have boosted the performance of Illinois Tool’s Test & Measurement and Electronics segment. Growth in the institutional end markets in North America, along with higher demand in the European warewash and cooking end markets, is likely to have driven ITW’s Food Equipment segment. ITW’s Polymers & Fluids segment’s performance is expected to have benefited from higher demand in Europe, arising from increasing demand in the life sciences end market.

Strong momentum in the ground support equipment, appliance, consumer packaging and strength films businesses is likely to have aided the Specialty Products segment’s performance. We expect the segment’s revenues to be $445.6 million, indicating a 1.3% increase from the year-ago number.

Also, cost management and enterprise initiatives are anticipated to have aided ITW’s margin performance.

However, a decrease in North American auto build rate, due to unfavorable customer mix and product line simplification activities, is likely to have weighed on ITW’s Automotive OEM segment. We expect the segment’s revenues to decrease 5.3% year over year to $772.8 million in the first quarter.

Also, the Welding segment is expected to have put up a weak show due to softness in the consumables and equipment business because of declining demand in the industrial and commercial end markets. We expect the segment’s revenues to decrease 2.3% year over year to $465.1 million in the first quarter.

ITW has considerable exposure to overseas markets. Given the company’s substantial international operations, foreign currency headwinds are likely to have marred its margins and profitability.

We expect the company’s total revenues to be $3.9 billion for the first quarter, indicating a decrease of 2.6% year over year. Adjusted earnings are expected to be $2.37 per share, indicating a 13.5% decline from the year-ago quarter’s number.

Earnings Whispers

Our proven model predicts an earnings beat for ITW this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. 

Earnings ESP: ITW has an Earnings ESP of +0.15% as the Most Accurate Estimate is pegged at $2.34 per share, which is higher than the Zacks Consensus Estimate of $2.33. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: ITW currently carries a Zacks Rank of 3.

Other Stocks to Consider

Here are some other companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.

Sealed Air Corporation SEE has an Earnings ESP of +0.12% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is slated to release first-quarter 2025 results on May 6. Illinois Tool’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.1%.

AptarGroup, Inc. ATR has an Earnings ESP of +0.17% and a Zacks Rank of 3 at present. The company is scheduled to release first-quarter 2025 results on May 1.

ATR’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.3%.

Caterpillar Inc. CAT has an Earnings ESP of +0.16% and a Zacks Rank of 3 at present. The company is slated to release first-quarter 2025 results on April 30.

Caterpillar’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.5%.

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This article originally published on Zacks Investment Research (zacks.com).

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