Illinois Tool Q4 Earnings Surpass Estimates, Revenues Miss

Illinois Tool Works Inc. ITW reported fourth-quarter 2024 adjusted earnings of $2.54 per share, which surpassed the Zacks Consensus Estimate of $2.49. Earnings increased 7% year over year.Illinois Tool’s revenues of $3.9 billion missed the consensus estimate of $4 billion. The top line inched down 1.3% year over year due to an unfavorable foreign currency translation of 1%. Also, organic sales decreased 0.5% while acquisition increased revenues by 0.2%.For 2024, ITW reported net revenues of $15.9 billion, which decreased 1.3% year over year. For the year, the company’s adjusted earnings were $11.71 per share, up 20% year over year.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.ITW’s Segmental PerformanceTest & Measurement and Electronics’ revenues were up 2.2% year over year to $747 million. Our estimate for segmental revenues was $760.6 million. Revenues from Automotive Original Equipment Manufacturer decreased 3.7% year over year to $785 million. Our estimate for segmental revenues was $832.9 million.Food Equipment generated revenues of $672 million, up 3% year over year. Our estimate for segmental revenues was $682.0 million. Welding revenues were $447 million, down 1% year over year. Our estimate for segmental revenues was $447.8 million.Construction Products’ revenues were down 5% year over year to $438 million. Our estimate for segmental revenues was $461.8 million. Revenues of $416 million from Specialty Products reflected a decrease of 5% year over year. Our estimate for segmental revenues was $477.5 million. Polymers & Fluids’ revenues of $430 million declined 2% year over year. Our estimate for segmental revenues was $459.3 million.Illinois Tool Works Inc. Price, Consensus and EPS Surprise Illinois Tool Works Inc. price-consensus-eps-surprise-chart | Illinois Tool Works Inc. QuoteIllinois Tool’s Margin ProfileIllinois Tool’s cost of sales decreased 3.9% year over year to $2.22 billion. Selling, administrative and research and development expenses decreased 0.5% year over year to $655 million. The operating margin was 26.2%, up 140 basis points (bps) from the year-ago quarter. Enterprise initiatives contributed 120 bps to the operating margin.ITW’s Balance Sheet and Cash FlowAt the end of the fourth quarter, Illinois Tool had cash and equivalents of $948 million compared with $1.1 billion at the end of December 2023. Long-term debt was $6.31 billion compared with $6.3 billion at the end of December 2023.In 2024, Illinois Tool generated net cash of $3.28 billion from operating activities, reflecting a decline of 7.3% from the year-ago number. Capital spending on the purchase of plant and equipment was $437 million, down 4% year over year. Free cash flow of $2.84 billion decreased 7.8% year over year.Illinois Tool’s 2025 GuidanceIllinois Tool expects earnings to be in the range of $10.15 - $10.55 per share. Organic revenues are expected to increase 0 - 2%. Operating margin is expected to be 26.5–27.5%. Enterprise initiatives are expected to contribute approximately 100 bps to the operating margin.Illinois Tool projects free cash flow to be 100% of net income. The company expects to repurchase about $1.5 billion worth of shares. The tax rate is expected to be in the band of 24-24.5%.ITW’s Zacks RankThe company currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other CompaniesTetra Tech, Inc. TTEK reported earnings of $0.35 per share in the first quarter of fiscal 2025 (ended December 2024), which beat the Zacks Consensus Estimate of $0.34. This compares with earnings of $0.28 per share a year ago.Tetra posted revenues of $1.2 billion for the quarter ended December 2024, surpassing the consensus estimate by 8.85%. This compares with year-ago revenues of $1.02 billion. The company topped the consensus estimate for revenues in each of the last four quarters.Waste Management, Inc. WM reported earnings of $1.70 per share in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $1.79. This compares with earnings of $1.74 per share a year ago.WM reported revenues of $5.89 billion for the quarter ended December 2024, surpassing the consensus estimate by 0.18%. This compares with year-ago revenues of $5.22 billion. The company topped the consensus estimate for revenues two times in the last four quarters.Packaging Corporation of America PKG reported adjusted earnings per share of $2.47 in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $2.51 by a margin of 2%. The bottom line matched PKG’s guidance and grew 16% year over year.Sales in the fourth quarter rose 10.7% year over year to $2.15 billion due to higher volumes and price/mix in both segments. The top line beat the consensus estimate of $2.13 billion.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Illinois Tool Works Inc. (ITW): Free Stock Analysis Report Tetra Tech, Inc. (TTEK): Free Stock Analysis Report Waste Management, Inc. 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