Illinois Tool Works (ITW) Earnings Call

Operator

Morning. My name is Connor Meek, and I will be your conference operator today. At this time, I would like to welcome everyone to ITW's Third Quarter Earnings Conference Call.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.

If you would like to withdraw your question, please press the star followed by the number 1 key again. For those participating in the Q&A, you will have the opportunity to ask 1 question and, if needed, 1 follow-up question. Thank you.

Erin Linnihan, Vice President of Investor Relations, you may begin your conference.

Erin Linnihan

Good morning, everyone. I am Erin Linnihan, Vice President of Investor Relations for ITW, and I am joined this morning by our President and CEO, Christopher O'Herlihy; and our Senior Vice President and CFO, Michael Larsen. During today's call, we will discuss ITW's third quarter 26 financial results and provide guidance for full year 2026.

Slide 2 is a reminder that this presentation contains forward-looking statements. Please refer to the company's 2025 Form 10 k and subsequent reports filed with the SEC for more detail about important risks that could cause actual results to differ materially from our expectations. This presentation uses certain non-GAAP measures, and a reconciliation of those measures to the most directly comparable GAAP measures are contained in the press release.

Please turn to slide 3, and it is now my pleasure to turn the call over to our president and CEO, Christopher A. O'Herlihy. Christopher?

Christopher A. O'Herlihy

Thank you, Erin, and good morning, everyone. As you saw in our press release this morning, the ITW team delivered another quarter of strong operational and financial performance. Our third quarter highlights include organic growth of 4%, or 5% excluding the impact of a tornado event at 1 of our welding locations.

Our top line was fueled by another meaningful increase in customer back innovation. And we are raising our full year CVA projection 3% plus. Operating margin expanded 40 basis points to 27.8% and operating income increased 6%.

Marking a new quarterly record for ITW. GAAP EPS exceeded our estimate and increased 7% to $3 Demand momentum this quarter continued to accelerate in our 2 CapEx related segments. Led by organic growth of 16% in Test and Measurement and Electronics and 7% in welding.

Or 15% excluding the tornado event. In addition, polymers and fluids grew 8%, due to robust contributions from both market share gains and new products. Beyond capitalizing on favorable market conditions, we continue to make meaningful progress on our long term organic growth agenda across all segments.

On that note, I am very encouraged by our customer back innovation progress. We so far this year has contributed more than 3% to revenue growth compared to 2.4% in 2025. As I mentioned, we are now projecting that CBI will exceed 3% for the full year.

Which is the single biggest catalyst for achieving our enterprise goal of sustained high quality organic growth of 4% or higher. Our performance year to date offers another proof point that disciplined execution on our next phase enterprise strategy priorities is yielding strong results. Positioning us very well for 2027 and putting us firmly on track to achieve our 2030 performance goals.

Before I transition to the bottom line, let me spend just a minute on the unfortunate tornado event that we mentioned on our call in July. Which damaged 2 of our welding facilities and reduced our revenues by about $40 million or 1 percentage point in the third quarter. I am pleased to say that our colleagues were all safe, and the team did an outstanding job quickly and safely restoring operations and taking care of customers.

Our swift recovery serves as a great demonstration of our ability to read and react, a key proof point of the value of ITW's decentralized entrepreneurial culture. With welding order growth running well ahead of revenue, we expect welding to return to strong growth again in the fourth quarter and carry good momentum into next year. On the bottom line, the ITW team continued to execute at a high level.

With enterprise initiatives contributing 130 basis points to our operating margin. And in a very dynamic inflationary environment, our teams continue to respond decisively and effectively Overall, price/cost was favorable in the third quarter. But as you can see, in a few segments such as automotive OEM and construction products, we have some catching up to do.

Turning to capital allocation. In the quarter, we raised our dividend 7%. Marking our 63rd consecutive year of dividend increases.

In the first 9 months of the year, we have returned $2.7 billion to shareholders through share repurchases and dividends. In terms of our outlook, we are raising our full year GAAP EPS guidance by $0.05 to a new midpoint of $11.50 reflecting 10% year-over-year growth. This marks our third guidance increase of the year.

Looking ahead to 2027, and with the caveat that we have not developed our annual plans yet, demand momentum continues to build across several of our end markets. Notably in welding and test and measurement electronics. In addition, we are exiting this year with CBI already at 3% plus.

We would expect another meaningful contribution from our enterprise initiatives and incremental margins in the 40% plus range. Our long term performance framework, 4%+ organic growth, and 30% operating margins by 2030 is very much intact. And remains well within our reach.

In conclusion, I want to thank our dedicated ITW colleagues around the world. And this quarter in particular, the welding folks in Appleton, Wisconsin for their dedication to serving our customers and executing our strategy with excellence. With that, I will hand the call over to Michael to walk you through the segment details and updated full year outlook.

Michael?

Michael Larsen

Thank you, Christopher, and good morning, everyone. Starting with the top line, total revenue grew 4.4%, driven by 3.8% organic growth, a 0.3% contribution from foreign currency translation and 0.3% from an acquisition. Excluding the tornado event in Welding, our organic growth rate would have been approximately 4.8%.

Importantly, order growth continued to accelerate in both welding and test and measurement electronics. And demand remains strong in polymers and fluids. Moving to the bottom line, operating margin expanded by 40 basis points year over year to 27.8% with another solid 130 basis points contribution from enterprise initiatives.

Sequentially, margins improved 110 basis points from Q2. In the quarter, price increases and other actions offset higher raw material costs in dollar and margin terms. Those favorable drivers were partially offset by inflation in other areas, such as employee related costs.

Free cash flow was $851 million or 100% of net income. And on a year to date basis, free cash flow grew 9% to more than $2 billion or 82% of net income. Finally, GAAP EPS was $3 an increase of 7% despite a headwind of about $0.10.

From a higher tax rate of 24.4% compared to 21.8% last year. Overall, a strong quarter operationally and financially and with significant positive momentum going forward. Turning to slide 4.

From a regional perspective, organic growth was up 6% in our largest region North America, Asia Pacific was up 3% with China down 2%, primarily due to a tough comparison of +10%. Europe was flat. Moving to the segment highlights, starting with automotive OEM.

Organic revenue was down 2% against a tough comparison last year of +5%. In Q3, North America was down 1%, Europe down 7%, and China was down 1%. In the quarter, we meaningfully outperformed build rates in both North America and China, Europe was impacted by unfavorable customer mix and product line simplification.

For the full year, we expect to outperform build rates and remain well positioned to continue to execute on our long term growth opportunities, such as EV growth in China. Operating margin was down 170 basis points, primarily due to resonance inflation and the resulting price/cost timing lag. Which was partially offset by favorable enterprise initiatives.

As usual, we expect to recover the price/cost impact over time, helped by new product launches, and we remain on track to achieve our longer term margin targets for the segment. Turning to Slide 5. Food Equipment organic revenue grew 1% overall as service strength of +5% Helped offset a 2% decline in equipment which marked a notable sequential improvement from the mid single digit equipment declines in the first half.

Regionally, North America was down 3% due to soft sequentially improving institutional demand in areas such as K-12, are impacted by a decline in funding levels, partially offset by high single digit growth in areas such as retail. On a positive note, international again delivered strong growth up 5% in the quarter. Operating margin improved 60 basis points to 29.8%.

Looking ahead, with North America orders up mid single digits, this quarter, we are now projecting year over year organic growth in the low single digits and operating margin expansion in Q4. Test and Measurement and Electronics had another outstanding quarter with 16% organic growth led by a 31% surge in electronics. Represents approximately 40% of the segment.

Test and measurement was up 8%, driven primarily by semiconductor demand, with general industrial order activity also beginning to pick up. The 2 main drivers of the strong growth that we are seeing in this segment are first, our electronic assembly businesses, which serve the printed circuit board industry and second, our semiconductor related businesses that serve the chip manufacturing industry. Staying invested in our strategic growth initiatives in those businesses through the cycle has positioned us to take full advantage of the significant growth opportunities that remain ahead as orders continue to outpace revenue growth by a wide margin.

Operating margin expanded by 330 basis points to 28.7%. Primarily as a result of strong operating leverage. Moving on to slide 6, welding was obviously impacted by the tornado event in the quarter but still managed to deliver remarkably resilient top and bottom line results.

Including 7% organic growth, which would have been 15% excluding the tornado event. Equipment revenue grew 5% as orders continued to surge across most end markets, and consumables grew double digit driven by both market tailwinds and strong new product adoption. North America, which represents 85% of the welding segment, was up 8% with broad based growth across both industrial and commercial markets.

As demand momentum continued to strengthen in end markets such as infrastructure, energy, aerospace, defense, and semiconductors. On the bottom line, the loss of operating income associated with the tornado event was offset by business interruption insurance, which favorably impacted margins. Looking ahead, we expect welding margins to return to their typical best in class levels.

In Polymers and Fluids, organic growth reached 8%. Driven by strength across most end markets with strong traction on CBI and continued market share gains. Organic growth was 6% in automotive aftermarket, while organic growth of 12% in polymers and 9% in fluids was supported by robust momentum in general industrial and biopharma markets.

Operating margin expanded 280 basis points to 31.3%. Turning to Slide 7. In our most interest rate sensitive segment, Construction Products, organic growth was down 1%.

Compared to end markets, which we estimate were down in the mid single digits. North America was flat, Europe was down 2%, and Australia and New Zealand was up 1%. While residential renovation in North America was down 2%, commercial construction which represents about 15% of the region, was up 19% due to strong demand in areas such as data center construction.

Operating margin was down 170 basis points to 29.9% due primarily to near term price/cost headwinds. Specialty products organic growth was down 1%, which includes the impact of 130 basis points of product line simplification, primarily in the appliance components business. North America grew 3% on solid demand for consumer packaging, offset by an 8% decline in international markets, which had a tough comparison of 7%.

Operating margin was down 90 basis points to 31.4%. With that, let's turn to our slide 8 for an update on our full year guidance. Overall, we are carrying significant positive momentum forward.

And are well positioned to continue to deliver strong operational and financial performance in the fourth quarter and beyond. Starting with the top line and per our usual process, our guidance is based on current levels of demand, adjusted for typical seasonality and prevailing foreign exchange rates. As a result, our organic growth projection remains 3% to 4% for the full year, despite the 5%+ in Q4.

Sequentially, revenues grow 1% to 2% from Q3 despite 2 fewer shipping days in Q4. We are raising total revenue growth guidance by 50 basis points to 4.5% to 5.5% to account for current foreign exchange rates. On the bottom line, our operating margin guidance remains unchanged. at 26.5% to 27.5%, and we expect Q4 margins in the mid- to high 27s.

Similar to Q3, which would mark a significant improvement year over year. Enterprise initiatives remain the primary margin driver and are expected to contribute more than 100 basis points. For the full year, we are estimating that price/cost will be favorable on an income basis and about neutral to margins in what remains a very dynamic environment.

Factoring in our strong third quarter results, we are raising our GAAP EPS guidance by $0.05 to a narrowed range of $11.45 to $11.55, with a new midpoint of $11.50 representing 10% year over year growth. Projected effective tax rate remains unchanged at 23% to 24%. Free cash flow conversion is projected to be approximately 100% of net income, full year share repurchases of approximately $1.5 billion.

Considering some of the unique challenges we had to deal with this quarter, we are pleased with our performance and especially the strong momentum across the company. Combined with our best in class margins and our disciplined operational execution, we remain well positioned to deliver differentiated financial performance. In 2026 and beyond.

With that, I will turn the call back over to Erin.

Erin Linnihan

Thank you, Michael. Connor, please open the line for questions.

Operator

At this time, I would like to remind everyone to ask a question, press star, then the number 1 on your telephone keypad. Your first question comes from a line of Jamie Cook with Truist Securities. Your line is open.

Please go ahead.

Jamie Cook

Morning, Jack.

Michael Larsen

Good morning.

Christopher A. O'Herlihy

Hey. Good morning.

Jamie Cook

I guess I have 2 questions for you. First, just on the price/cost in the quarter. Think originally, you would said it would have been a headwind.

You expected a headwind of 30 bps, and it sounds like it was better than that. Just if you could quantify that. Then I guess my second question, it sounds like there is opportunities within automotive and construction for margins to improve. just it sounds like there is a pricing lag there.

Can you talk to what pricing that you are taking and when we should see that start to hit the bottom line?

Michael Larsen

Yeah. Let's start with the price/cost. And if we look back to Q3, our pricing actions largely, came through as planned.

And like everyone else, we continue to see a lot of inflation in raw material costs such as resin, chemicals, steel, and electronic components, kind of in that 4% to 5% range. Price/cost was modestly favorable in the third quarter. And, you know, given the dynamic environment, we do not really want to provide a whole lot more detail than that.

What we can say is that for the full year, we also expect the margin impact to be about neutral for the full year. Just given the very kind of dynamic conditions here, so we are going to refrain from providing more detail on Q3 and Q4 and quantifying specifically the basis points. Now looking ahead to 2027, what we have talked about in the past is still the case that we expect conditions to normalize here in 2027, which typically is a 10 to 20 basis points tailwind to margins from price cost.

So that is kind of the base assumption for 2027. So a little bit of near term, headwind and we expect to get through that over the next you know, by year end, and next year then would be a more kind of normal environment. And then maybe on the automotive OEM margins Christopher, if you wanted to comment.

Christopher A. O'Herlihy

Yeah. So I would say in both auto and construction, we are busily recovering price right now. But I think in both cases, you know, I think with margins across all 7 segments particularly if we talk about auto for a second, the primary drivers of auto margins are enterprise initiatives and higher margin innovation.

And then we are making great progress on those both in auto and construction. We see those sustaining into next year.

Jamie Cook

Okay. Sorry. And 1 follow-up.

Obviously, Christopher, congratulations. It seems like we are getting some good traction on CBI. it is trending ahead of your expectations Besides auto, what are the big where are you seeing the biggest benefits? And should we assume that momentum improves continues to improve into 2027?

Thank you.

Christopher A. O'Herlihy

Yeah. You should assume it continues to improve. What I would say is that, just to, refresh, you know, in terms of how we think about this. what is captured in our CBI numbers incremental revenue growth over a 3-year period, Net of cannibalization.

So on that basis, you need to keep refilling the pipeline with new projects. So it can be a little lumpy from quarter to quarter, but what is evident is that the work that we have done over the past 2, 3 years has really resulted in this step change from what was 1% 5 years ago to 2% 2 years ago to a 3% contribution level right now. And we would expect, you know, given the improvements in innovation across the company, as you surmise, this number to incrementally improve from here on a year over year basis going forward.

And as we have said, you know, the most actionable and way that we drive organic growth over the long term is CBI. We are pretty encouraged by what this means for organic growth. Thank you.

Operator

The next question is from Andy Kaplowitz of Citigroup. Your line is open. Please go ahead.

Andy Kaplowitz

Good morning, everyone.

Michael Larsen

Hi, and good morning.

Andy Kaplowitz

Christian, Michael, I know you generally have short cycle businesses, but you obviously won 2026 with relatively strong organic revenue growth. And I would imagine you have some backlog in your CapEx focused businesses now. So how does that position you when you think about 2027?

Christopher, I think you sounded pretty confident regarding meeting or beating that 4% or better algorithm that you have. But maybe you can elaborate on any puts and takes. I know you talked about CBI, but anything else?

And maybe elaborate on if you do have backlog in these CapEx businesses?

Michael Larsen

So we do have a little bit more backlog than usual. But we are talking about months, not years of backlog. So just as a reminder, we are still very much a short cycle business.

Part of that is because of our 80/20 operating system, which allows us to take orders today, ship them tomorrow, and then replenish the inventory the next day. So there is no incentive for customers to place orders significantly ahead of when they need them. So.and we kind of-- That said, obviously, with what we have seen on the CapEx side of the business, particularly in welding and test and measurement electronics, We are carrying a little bit more backlog than usual.

We actually saw, to complete the picture, a little bit of a backlog increase also in the food equipment business here going into the fourth quarter. So all of that bodes really well for this 5% plus organic growth number that is implied in our guidance. For 2026.

And maybe more importantly, as we go into 2027, not so much the backlog, but just the underlying momentum that we are seeing in these businesses, the feedback we are getting from customers, the new products that are coming through, at significantly higher margins now, as Christopher said, at a 3% plus CBI contribution. And 3% plus in the segments we just talked about, you know, welding and test and measurement is--you could surmise that it is significantly higher than 3. In those segments.

So those really have a lot of momentum going into 2027.

Christopher A. O'Herlihy

Yeah. I would just add to that, Andy, that, you know, the as Michael indicated, you know, strong order intake, higher than revenue growth for both test and measurement, and Welding in the quarter. what is also encouraging is that welding and test and measurement that the growth is pretty broad based. So think about welding, you know, very strong growth, not on the industrial side in areas like energy, aerospace, construction fabrication, and so on.

But also on the commercial side on small fab. Similarly with test and measurement, you know, obviously semi has been strong for a little while now, but we are now starting to see a real pickup on the industrial side of the business as well in areas like Instron. So even though we do not forecast cycles, I would certainly say that the current order activity and the feedback, to Michael's point, that we are getting from our customers gives us some good confidence going into 2027.

Andy Kaplowitz

Thanks for that, guys. And then I think 8% organic growth in Polymers and Fluids is the strongest growth you have had in the last few years in that segment. So I know you mentioned market share gains.

Strength in general industrial and biopharma, but maybe you could give us a little color on the sustainability of that growth for that segment.

Christopher A. O'Herlihy

Sure. So Polymers and Fluids has been building for a little while now, and you know, certainly some gains, but also, I think, some real nice progress on CBI, above-average contribution from CBI, CBI, in that segment. We are broad based across all 3 platforms of automotive aftermarket, polymers, and fluids.

I would say polymers in particular really well positioned in very high growth markets. Pretty sophisticated adhesive bonding applications, things like electronics, electric vehicles, And then similarly on the fluids business, we are having some real nice success on the biopharma space. So I think what this all says, Andy, is that it really highlights the fact that this segment is really well positioned to be a 4% plus grower for the enterprise on a sustained basis.

Going forward.

Michael Larsen

And I would just add, Andy, as you think about this from a modeling standpoint, the comparison does get quite a bit tougher here in the fourth quarter. So Q4 last year, as Christopher said, this has been going on for a while, was up the segment was up 5% organic. And so the, you know, the Q4 growth rate might not be you know, starting with an 8, is kind of what I am trying to tell you here.

Andy Kaplowitz

Got it. Appreciate all the color, guys.

Michael Larsen

Sure. Thanks, Andy.

Operator

Next question is from the line of Julian Mitchell with JPMorgan. Line is open. Please go ahead.

Julian Mitchell

Hi. This is Piyush, on for Julian. Thanks for taking the question.

Maybe first, on welding. You guys noted that the associated loss of operating income was largely offset by business interruption insurance. So what is the underlying margins in welding in Q3, and what should we expect in Q4?

Michael Larsen

Yeah. I think what I said in the prepared remarks was that we will expect to return to kind of our typical best in class margins in that, you know, 32%, 33%, 34% range.

Julian Mitchell

So Oh, okay. Got it. And maybe sticking 1 more on margins, maybe.

On the polymers and fluids margins, very strong. Anything 1 time here now into the 30s, can they stay here or maybe push up? Any color here.

Michael Larsen

Yeah. I think, like I just said to Andy, I think we. We are probably expecting a little less operating leverage here in the fourth quarter, and so maybe a little bit lower than what we put up here in the third quarter, which I believe was a record for the segment, by the way.

But still very helpful. Yeah. Still very healthy.

So got it.

Julian Mitchell

Thank you.

Michael Larsen

Sure.

Operator

The next question is from the line of Steven Fisher with UBS. Your line is open. Please go ahead.

Steven Fisher

Thanks. Good morning.

Christopher A. O'Herlihy

Good morning.

Steven Fisher

You mentioned, Michael, that construction products is the market with the biggest interest rate sensitivity, which makes sense given the housing relevance there. But I am wondering are there any areas within your own business or products that are more affected by financing costs, thinking like large commercial dishwashers, etcetera, that might be financed. Are you seeing any impact from higher interest rates or hearing any anecdotes on that from your various businesses?

Operator

Not specific to food equipment, which I think is your question.

Michael Larsen

I mean, I think if you just look at the portfolio, it is pretty easy to see that the growth is really driven by the more industrial businesses. The CapEx related businesses as well as Polymers and Fluids. there is a fair bit of underlying industrial demand in that business. And then there is a little bit more challenge in the more consumer oriented, kind of interest rate sensitive parts of the company which would be construction, maybe to some extent also the automotive business.

But, really, I think you know, construction and automotive are the ones we would consider the most interest rate sensitive. I think it is really encouraging when you look at the automotive business here. In the third quarter, that in North America, we significantly outperformed bills, which is and the same is true in China. by about 5 basis points, 5 percentage points in both cases.

And so there is room for opportunities for growth here, with select customers and as a result of really driving CBI and new products. In this segment. And then the challenge was really mostly on the European side.

But that was kind of a unique situation related to PLS and customer mix. But that is really how we would think about it.

Steven Fisher

Okay. that is helpful. And then just maybe from a geographic perspective, just love to gauge your sense of momentum or relative optimism or pessimism I mean, noticing that Europe is flat, see North America growing nicely. Just kind of curious if you have any feeling about whether Europe can hold flat And if it does not, are you assuming that North America will accelerate Just curious for sort of any momentum and commentary around geographies.

Michael Larsen

Yeah. I think, Steven, what is very clear is, you know, North America is the fastest growing region like I said, up 6% here in the third quarter. We do expect that momentum to continue and maybe even build a little bit here in Q4.

And then we will. When we do the plans for next year, we will have a better feel for that. But a lot of positive momentum in North America, particularly test and measurement electronics, welding, Polymers and Fluids, kind of the usual suspects are driving a lot of the growth there, and we expect that to continue in the fourth quarter.

Europe, it is tough to be super optimistic about Europe, about flat here in Q3. Could be a little bit better. In the fourth quarter, tied to automotive, test and measurement electronics.

But not expecting you know, a lot of improvement in that geography. And then, you know, China, after years of double digit growth and I think last year, up 9%, I think the growth there, as you would expect, has maybe slowed down a little bit, and so we are still in kind of the flat kind of China, maybe down low single digits in Q3 and Q4. But a lot of potential going forward in that geography.

So maybe that is how we would handicap it by region.

Steven Fisher

Very helpful. Thank you.

Christopher A. O'Herlihy

We will embrace what we have in your business, food equipment, yeah.

Michael Larsen

that is true. Yeah. I mean, I think that is a really good point.

Know, food equipment up mid single digits. Like I said, in Europe, both on the equipment as well as on the service side. And so that is a real strength for the company.

Christopher A. O'Herlihy

Great.

Michael Larsen

Thank you. Yep.

Operator

The next question is from Nicole DeBlase of Deutsche Bank. Your line is open. Please go ahead.

Nicole?

Analyst

Oh, sorry, guys. I was on mute. Can you hear me now?

Michael Larsen

We can. Go ahead. You guys said you kind of expect flat margins sequentially in the fourth quarter, but we know that, that welding insurance gain kind of goes away.

You talked about polymers and fluids probably seeing a bit of sequential decline. What is then getting you back to flat? Are you expecting Q on Q margin expansion across the rest of the businesses?

And were there any tariff refunds in the margins this quarter? So I think, really, if you look at the Q4 margins, I think what you are hinting at is the fact that margins typically go down from Q3 to Q4. The reason that we do not think that is the case is based on current run rates, we actually expect revenues to go up sequentially.

From Q3 to Q4. We said between, you know, 1% to 2% growth sequentially, which gets us to that 5% plus organic revenue growth. In the fourth quarter.

And so beyond that, that operating leverage that comes with that, everything else is pretty much the same. In terms of the biggest structural driver of margin improvement remains the enterprise initiatives. Which could just contribute 130 basis points expect another 100 there.

Volume leverage was favorable in Q3. Like I said, we expect that to be more favorable in Q4. We are being a little cautious around price/cost just given how quickly those can move around.

But overall, you know, we are pretty confident that we will be able to improve margins here in the fourth quarter. On a on a year over year basis and then sequentially about the same which bucks kind of the typical seasonality.

Analyst

Okay. Okay. Thank you. that is really helpful.

And then just as a follow-up, the 31% organic growth in electronics pretty stunning. What are your thoughts on the sustainability of that magnitude of growth in the fourth quarter and perhaps into 2027 as well?

Christopher A. O'Herlihy

Yeah. So, Nicole, we believe it is very, very sustainable based on the strong order activity that we are seeing from our semi electronics customers. I mean, these customers are working very hard to increase fab capacity, produce printed circuit boards and meet the growing needs of AI.

You know? So very sustainable, very encouraging. This is an area where we have invested in considerably over the last number of years.

So we are now very well positioned to completely capitalize on that. it is also a great opportunity for us to innovate for us. given the strong competitive advantages that we have as it relates to semi manufacturing testing equipment particularly, we are really well positioned here to take share as the end markets continue to improve.

Analyst

Thank you. I will pass it on. Thank you.

Operator

As there are no more questions at this time, we would like to thank you for participating in today's conference call. All lines may now disconnect.

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Illinois Tool Works Earnings Calls | ITW

Earnings Calls

Date

Illinois Tool Works Earnings Call Transcript - Q3 FY 2026

Operator

Erin Linnihan

Christopher A. O'Herlihy

Michael Larsen

Erin Linnihan

Operator

Jamie Cook

Michael Larsen

Christopher A. O'Herlihy

Jamie Cook

Michael Larsen

Christopher A. O'Herlihy

Jamie Cook

Christopher A. O'Herlihy

Operator

Andy Kaplowitz

Michael Larsen

Andy Kaplowitz

Michael Larsen

Christopher A. O'Herlihy

Andy Kaplowitz

Christopher A. O'Herlihy

Michael Larsen

Andy Kaplowitz

Michael Larsen

Operator

Julian Mitchell

Michael Larsen

Julian Mitchell

Michael Larsen

Julian Mitchell

Michael Larsen

Operator

Steven Fisher

Christopher A. O'Herlihy

Steven Fisher

Operator

Michael Larsen

Steven Fisher

Michael Larsen

Steven Fisher

Christopher A. O'Herlihy

Michael Larsen

Christopher A. O'Herlihy

Michael Larsen

Operator

Analyst

Michael Larsen

Analyst

Christopher A. O'Herlihy

Analyst

Operator

Operator

Erin Linnihan

Christopher A. O'Herlihy

Michael Larsen

Jamie Cook

Andy Kaplowitz

Julian Mitchell

Steven Fisher

Analyst