Illinois Tool Works Inc (0J8W.L) Q4 2024 Earnings Report

Illinois Tool Works (0J8W.L) reported Q4 2024 revenue of $3.932 billion, with gross profit of $1.686 billion and a gross margin of 42.9%. Operating income was $1.031 billion (operating margin 26.2%), and net income reached $750 million (net margin 19.1%), translating to diluted EPS of $2.54. YoY revenue declined 1.28% and QoQ revenue declined 0.86%, while net income rose about 4.6% year-over-year amid margin discipline and favorable product mix. Free cash flow totaled $996 million for the quarter, supported by $1.114 billion of operating cash flow and a disciplined capital allocation program that included $443 million in dividends and $375 million in share repurchases, offset by $118 million of capital expenditure. The company carried total debt of approximately $8.08 billion and net debt around $7.13 billion, with a debt-to-capitalization of roughly 70.9% and interest coverage of 15.2x, indicating solid balance sheet resilience even as leverage remains a focus for investors.

Management continued to emphasize cash generation and returns to shareholders, underpinned by ITW’s diversified industrial portfolio and high-margin franchises. While 2024 saw modest revenue headwinds, the margin profile and cash flow performance position ITW to weather cyclical volatility and fund ongoing capital returns. No explicit full-year revenue guidance is provided in the QQ4 release, necessitating close monitoring of end-market demand, pricing dynamics, and input costs as macro conditions evolve. Overall, ITW remains a high-quality, cash-generative franchise in the industrials space, though investors should weigh the premium valuation against its durability, balance sheet strength, and ongoing capital allocation strategy.