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Jun 30, 2021
ITW Q2 2021 Earnings Report
ITW's revenue increased by 43 percent and GAAP EPS increased by 143 percent.
Key Takeaways
ITW reported a strong second quarter with significant growth in revenue and earnings. The company saw continued improvement in the recovery, with organic revenue growth at the segment level ranging from 17 to 84 percent. Despite rising raw material costs and supply chain challenges, ITW delivered 43 percent revenue growth and 143 percent earnings growth.
Total revenue of $3.7 billion, an increase of 43% with organic growth of 37%.
Operating margin of 24.3%, an increase of 680 basis points.
GAAP EPS of $2.45, an increase of 143%.
Raising full year organic growth guidance to a range of 11 to 13 percent and GAAP EPS guidance to a range of $8.55 to $8.95 per share.
Revenue by Segment
Forward Guidance
The company is raising its full-year GAAP EPS guidance to $8.55 to $8.95 per share and raising its organic growth guidance to a range of 11 to 13 percent.
Positive Outlook
- Raising full-year GAAP EPS guidance to $8.55 to $8.95 per share.
- Raising organic growth guidance to a range of 11 to 13 percent.
- Foreign currency translation impact at current foreign exchange rates is projected to contribute 3 percentage points to revenue growth.
- Raw material cost increases are expected to be offset by price increases on a dollar-for-dollar basis and therefore EPS neutral.
- Free cash flow is expected to be approximately 100 percent of net income adjusted for the second quarter one-time tax benefit.
Challenges Ahead
- Full year margin dilution impact from price/cost is now forecasted to be approximately 100 basis points.
- Operating margin is expected to be in the range of 24.5 to 25.5 percent, 50 basis points lower versus previous guidance.
- Impact of Automotive OEM customers adjusting production schedules reduced ITW’s revenues by approximately $60 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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