$ITW · ILLINOIS TOOL WORKS INC
ITW reported Q3 2026 results with revenue of $4.236B (+4.4% YoY), record operating income of $1.177B, and GAAP EPS of $3.00 (+6.8% YoY). Operating margin expanded 40 bps to 27.8%. The company raised FY2026 GAAP EPS guidance by $0.05 at the midpoint to $11.45–$11.55, representing +10% YoY growth. A tornado damaged two Welding facilities in late July, reducing Q3 revenue by an estimated $40M, though business interruption insurance largely offset the operating income impact.
- Q3 revenue $4.236B, +4.4% YoY; organic growth +3.8% (+5% ex-Welding tornado impact)
- Record operating income $1.177B, +5.9% YoY; operating margin expanded 40 bps to 27.8%
- GAAP EPS $3.00, +6.8% YoY; free cash flow conversion at 100% of net income
- FY2026 GAAP EPS guidance raised $0.05 at midpoint to $11.45–$11.55, implying +10% YoY growth
- Welding segment hit by tornado damage: ~$40M revenue impact in Q3, largely offset by insurance
Stock down 2.76% to $268.61 in regular trading despite raised guidance and record operating income — likely reflecting the $40M Welding tornado headwind and Automotive OEM organic decline of 2.1%.
ITW delivered record profitability and raised guidance despite a $40M tornado hit to its highest-margin Welding segment, demonstrating the resilience of its business model.
ITW's 27.8% operating margin and 100% free cash flow conversion continue to set the benchmark for multi-industry peers. The capex-sensitive segments (Welding, Test & Measurement) showed accelerating demand, contrasting with weakness in Automotive OEM.
Tornado damage to two Welding facilities in late July reduced Q3 revenue by ~$40M; while insurance largely offset the operating income hit, any prolonged disruption or uninsured costs could pressure the segment. Automotive OEM organic revenue declined 2.1% YoY, signaling end-market softness.