Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
ITW's second quarter was defined by broad-based organic growth of 4.5%, as management highlighted strong demand in semiconductor and welding end markets alongside execution of its proprietary 80/20 Front-to-Back process. The company's enterprise initiatives contributed 120 basis points of margin expansion, though higher employee-related costs and unfavorable price/cost dynamics partially offset these gains. A standout was the Test & Measurement and Electronics segment, where organic revenue surged 10% on robust semiconductor and electronics demand, while Welding grew 14% organically, powered by North American industrial activity. However, Food Equipment margins contracted as product mix and investment weighed on profitability. Overall, ITW leveraged its decentralized model to navigate tariff uncertainty and deliver solid results, positioning for sustained high-quality organic growth.
Revenue
$4.3B
+6.12% YoY
EPS (Diluted)
$2.84
+10.08% YoY
Operating Income
$1.15B
+7.40% YoY
Source: SEC XBRL
Illinois Tool Works (ITW) reported Q2 FY2026 revenue of $4.3B, up 6.1% year over year. Operating margin was 26.7%, up 0.3 points from 26.4% a year earlier. ITW's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 2.84 | 2.82 | Beat +0.6% |
| Mar 2026 | 2.66 | 2.59 | Beat +2.7% |
| Dec 2025 | 2.72 | 2.71 | Beat +0.3% |
| Sep 2025 | 2.81 | 2.74 | Beat +2.5% |
Reported EPS of $2.84 versus the $2.82 analyst consensus — a +0.6% beat for Jun 2026.
7 reported segments · SEC XBRL
Segment revenue totals $4.3B, which is the $4.3B of consolidated revenue on the income statement.
Profit above is reported as operating income, the measure ITW itself discloses in this filing. Each company chooses its own measure here, so these margins are not comparable with another company's.
Compiled by AI from 10-Q Item 2 of this filing
Organic revenue increased 4.5% in Q2, led by Test & Measurement/Electronics and Welding, while product line simplification reduced organic revenue by 60 basis points. Operating margin expanded 40 basis points to 26.7%, with enterprise initiatives contributing 120 basis points, partially offset by higher employee-related expenses and unfavorable price/cost.
Source: 10-Q Item 2 MD&A
Management believes ITW is well positioned to minimize tariff impacts because its businesses generally manufacture in local markets and can recover increased costs through price increases. However, ongoing tariff policies have introduced additional demand uncertainty.
Source: 10-Q Item 2 MD&A
This segment delivered 10.0% organic revenue growth in Q2, driven by higher demand in semiconductor and electronics end markets, particularly in electronics assembly which grew 49.2% organically.
Source: 10-Q Item 2 MD&A
Welding organic revenue grew 13.9% in Q2, with North American industrial end market up 16.7% organically, driven by infrastructure, energy, aerospace and defense demand.
Source: 10-Q Item 2 MD&A
ITW repurchased approximately 2.9 million shares for $750 million in Q2 2026, bringing year-to-date repurchases to $1.1 billion.
Source: 10-Q Item 2 MD&A
Compiled by AI from this SEC filing · 1 high, 3 medium, 1 low
With a current ratio of 1.11 and long-term debt of $6.5B, ITW faces potential liquidity constraints if cash flows weaken. However, cash equivalents and strong operating cash flow provide a buffer.
Source: 10-Q Balance Sheet (XBRL)
Significant revenue from automotive, welding, electronics, and industrial markets means ITW is sensitive to economic cycles. A downturn in these sectors could materially reduce demand.
Source: 10-Q Income Statement (XBRL)
Evolving U.S. tariffs and retaliatory actions increase uncertainty. Although ITW manufactures locally and can pass through costs, demand may be negatively impacted if trade policies escalate.
Source: 10-Q Item 2 MD&A
ITW operates globally, and foreign currency translation contributed 1.4 percentage points to revenue growth in Q2. Adverse FX movements could reverse this tailwind and pressure profits.
Source: 10-Q Income Statement (XBRL)
North American organic revenue grew 6.4% in Q2, representing a large share of total business. A regional economic slowdown would have an outsized impact on overall results.
Source: 10-Q Item 2 MD&A
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 4.30 $B | 4.05 $B | +6.12% |
Cost of Revenue $B | 2.03 $B | 1.91 $B | +6.22% |
Operating Income $B | 1.15 $B | 1.07 $B | +7.40% |
EPS (Basic) $ | 2.85 $ | 2.58 $ | +10.47% |
EPS (Diluted) $ | 2.84 $ | 2.58 $ | +10.08% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
ITW delivered solid Q1 FY2026 results with revenue up 4.6% YoY to $4.02B and operating margin expanding to 25.4%, while EPS grew 11.3% to $2.66 driven by operational efficiency and share repurchases.
ITW delivered modest revenue growth of +0.9% to $16.0B in FY2025, but EPS declined sharply by -10.5% to $10.52, reflecting higher costs and a lower share base benefit, while operating margin compressed slightly to 26.3%.
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