Illinois Tool Works Inc. (ITW) has reported its first quarter 2025 results, citing a revenue of $3.8 billion, reflecting a 3.4% decrease from the previous period. The organic revenue declined by 1.6%, and on an equal days' basis, organic revenue was essentially flat. The decline was attributed to a 1.8% reduction in revenue due to foreign currency translation impact.
The company's GAAP EPS for the first quarter of 2025 was reported at $2.38, marking a 2% decline from the previous period. This decline was partly due to approximately $0.10 of headwind from higher restructuring expenses and unfavorable foreign currency translation impact. Operating margin for the same period stood at 24.8%, a decrease of 60 basis points, although enterprise initiatives contributed 120 basis points.
Operating cash flow for the first quarter was reported at $592 million, with free cash flow at $496 million, representing a conversion of 71% to net income. During the quarter, the company repurchased $375 million of its own shares. The effective tax rate was 21.7%, which included a discrete tax benefit of $21 million related to the reversal of valuation allowances on net operating loss carryforwards.
Looking ahead, ITW is maintaining its full-year 2025 guidance, with a projected GAAP EPS range of $10.15 to $10.55 per share. The company expects revenue and organic growth to be in the range of zero to two percent, factoring in ongoing pricing actions that are projected to offset tariff cost impacts. The operating margin is projected to be in the range of 26.5% to 27.5%, with enterprise initiatives contributing 100 basis points or more. ITW also expects free cash flow to exceed 100% of net income and plans to repurchase approximately $1.5 billion of its own shares.
The company's strong financial profile and strategic investments position it to navigate the volatile external environment, leveraging its decentralized operating culture and diversified business portfolio for resilience during times of uncertainty.
The market has reacted to these announcements by moving the company's shares -1.2% to a price of $238.9. For more information, read the company's full 8-K submission here.
