Engineered products manufacturer Illinois Tool Works Inc. (ITW) Tuesday reported a decline in profit for the third quarter, that reflected lower revenues across all business segments. The company also issued earnings and revenue guidance for the fourth quarter.
Net income for the third quarter was $302.42 million or $0.60 per share, lower than $453.52 million or $0.87 per share last year.
Net income from continuing operations declined to $302.96 million or $0.60 per share from $464.59 million or $0.89 per share last year.
On an average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.53 per share. Analysts' estimates typically exclude special items.
As part of the third quarter impairment review, the company recorded $12 million of impairment or a reduction of 2.5 cents of earnings, related last year's acquisition of a truck remanufacturing and parts/service business.
The company's effective tax rate for the quarter was 32.5%, higher than the previously forecasted third-quarter tax rate of 28%, which reduced earnings by 3.5%. The higher tax rate was due to the non-deductibility of the goodwill associated with impairment and several discrete tax adjustments.
The Glenview, Illinois-based company's operating revenues declined 19.8% to $3.58 billion from $4.46 billion in the prior year. Analysts were looking for revenues of $3.57 billion.
In the preceding second quarter, Illinois has reported net income of $176.6 million or $0.35 per share, on operating revenues of $3.39 billion.
Illinois noted that operating revenues for the third quarter were better than the prior quarter, as worldwide end markets continued to stabilize, or in some cases, modestly improved.
The company's base revenues for the quarter declined 17.9% compared with a year ago, with North American base revenues decreasing 21.6% and international base revenues declining 13.8%. The company noted that acquisitions added 3.6% to revenues, while translation negatively impacted revenues by 5.6%.
Segment-wise, worldwide revenues for the Power Systems and Electronics segment declined 34.6%, with base revenues decreasing 34.2%. Revenues from Transportation segment declined 7%, with base revenues decreasing 7.9%.
Worldwide revenues from the Food Equipment segment declined 10.2%, with base revenues decreasing 6.3%. North American food equipment base revenues decreased 8% and international food equipment base revenues fell 4.9%.
For the quarter, operating margins declined 150 basis points to 13.5%, while base margins improved 20 basis points compared with the year-earlier quarter. Illinois recorded operating income of $483.6 million, lower than $671 million in the previous year.
For the nine-month period, net income plunged to $439.61 million or $0.88 per share from $1.29 billion or $2.45 per share in the comparable period. Year-to-date, operating revenues were $10.12 billion, lower than $13.15 billion in the prior year.
Further, the company incurred $31 million of restructuring expense in the third quarter, bringing year-to-date restructuring total to $128 million. The company expects to incur between $25 million and $40 million of restructuring in the fourth quarter.
Looking ahead, for the fourth quarter, the company anticipates earnings from continuing operations to be in a range of $0.54 to $0.66 per share. The fourth quarter forecast assumes a total revenue range of negative 1% to positive 5%, compared with the third quarter. Analysts currently expects earnings of $0.56 per share for the fourth quarter on revenues of $3.63 billion.
ITW is currently trading at $47.24 per share, up 2.03% on the New York Stock Exchange on a volume of 4.37 million shares. For the past 52 weeks, the stock has ranged between $25.60 and $48.08.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.