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Dec 31, 2020
ITW Q4 2020 Earnings Report
ITW demonstrated strong execution and financial performance, generating record Q4 operating income, operating margin, and ROIC performance.
Key Takeaways
ITW reported a 0.2% increase in fourth-quarter revenue to $3.5 billion, with a 7% increase in operating income to $883 million. The operating margin was a record 25.4%, and GAAP EPS increased by 2% to $2.02. The company provided 2021 guidance, including EPS growth of 18% at the mid-point.
Total revenue of $3.5 billion, an increase of 5% versus Q3 2020
Record Q4 operating income of $883 million, an increase of 7% year-over-year
Record Q4 operating margin of 25.4% as enterprise initiatives contributed 130 basis points
GAAP EPS of $2.02, an increase of 2%, or 7% excluding $0.11 of divestiture gains in Q4 2019
ITW
ITW
ITW Revenue by Segment
Revenue by Segment
Automotive OEM Revenue
CapyFin.comFood Equipment Revenue
CapyFin.comTest & Measurement and Electronics Revenue
CapyFin.comWelding Revenue
CapyFin.comPolymers & Fluids Revenue
CapyFin.comConstruction Products Revenue
CapyFin.comSpecialty Products Revenue
CapyFin.com Forward Guidance
The company initiated full-year GAAP EPS guidance in a range of $7.60 to $8.00 per share, an increase of 15 to 21 percent. Organic growth is expected to be in the range of seven to ten percent. Revenue is expected to grow in the range of nine to twelve percent.
Positive Outlook
- Organic growth of 7 to 10%
- Revenue growth of 9 to 12%
- Foreign currency translation to increase revenues by approximately two percent.
- Operating margin is expected to be in a range of 24 to 25 percent
- Free cash flow is expected to be greater than 100 percent of net income
Challenges Ahead
- PLS impact is forecasted to be approximately 50 basis points.
- Effective tax rate in the range of 23 to 24 percent.
- Potential effects of the COVID-19 pandemic
- Expected impact of tariffs and raw material inflation
- Product line simplification activities
Revenue & Expenses
Visualization of income flow from segment revenue to net income