Illinois Tool Works Inc. (NYSE:ITW) reported Thursday first-quarter 2026 results, with GAAP EPS of $2.66, beating the $2.56 estimate.

Revenue of $4.016 billion topped the $4.008 billion estimate, rising about 5% year over year, while shares traded lower.

Margins And Cash Flow Performance

Operating income increased 7% to $1.02 billion, while margin expanded 60 basis points to 25.4%, driven by enterprise initiatives. Organic growth was 0.4%, with foreign exchange contributing 3.9%.

Operating cash flow totaled $623 million, and free cash flow was $528 million.

The company held $827 million in cash and reported total debt of $9.15 billion.

Segment Performance Breakdown

Segment results showed Automotive OEM revenue of $820 million with a 21.0% margin, and Food Equipment $637 million at 24.7%.

Test & Measurement and Electronics generated $715 million with a 22.9% margin, while Welding posted $507 million at 32.1%.

Polymers & Fluids reported $452 million at 28.0%, Construction Products $458 million at 29.4%, and Specialty Products $431 million at 31.3%.

Capital Allocation And Management Commentary

The company repurchased $375 million of shares during the quarter.

CEO Christopher A. O’Herlihy said, “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.”

Outlook And Guidance

Illinois Tool Works raised full-year 2026 GAAP EPS guidance to $11.10–$11.50 from $11.00–$11.40, above a $11.27 estimate.

The company affirmed sales guidance of $16.378 billion–$16.699 billion, compared with a $16.564 billion estimate.

It expects margins of 26.5%–27.5% and free cash flow above net income, while citing inflation, tariffs, and supply risks.

Conference Call Highlights

The company raised full-year EPS guidance to $11.30, the midpoint, while maintaining 1–3% organic growth expectations. Enterprise initiatives drove margin gains, while welding, test, and measurement led organic growth.

Management expects all segments to deliver growth in 2026 and highlighted its Customer Backed Innovation strategy targeting 3% revenue contribution by 2030.

ITW Price Action: Illinois Tool Works shares were down 3.13% at $257.35 at the time of publication on Thursday, according to Benzinga Pro data.

Photo by T. Schneider via Shutterstock