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Call sheet · Q1'26

Illinois Tool Works (ITW)

Q1'26 earnings call · held April 30, 2026 · compared with the Q4'25 call · management-credibility review
9/12
Disclosure score
2 medium, 4 low flags
Financial quality
Bottom line
The sleeper story is the semi-equipment recovery within T&M - this $500M business grew 15%+ and has strong order momentum, but it's getting lost in the broader industrial narrative. The obvious headline of 'solid start' masks the real story: organic growth barely positive at 0.4% with CapEx recovery offset by consumer weakness. The binding constraint isn't demand in their strong segments, it's the drag from Food Equipment institutional and auto weakness. Most telling quote: CBI progress went from '2.4%, 40 basis point improvement' to 'tracking really well' - classic metric drift when progress stalls. My view changes if they restore specific CBI yield numbers next quarter and if semi order momentum translates to sustained double-digit growth rates.

The 30-second version

  • Semi-Test Equipment is the Sleeper Growth Driver Everyone's Missing
  • CapEx Recovery is Real, But Consumer Weakness Offsetting It
  • They Stopped Breaking Out CBI Yield Numbers - Classic Metric Drift

What changed this quarter

MetricQ4'25Q1'26Change
Total Revenue$3.9B (+4.1% YoY)$4.0B (+4.6% YoY)+50bps acceleration
Organic Growth1.3%0.4%-90bps deceleration to barely positive
Operating Margin26.5%25.4%-110bps sequential decline (seasonal)
GAAP EPS$2.72$2.66-$0.06 sequential but +12% YoY
Welding Revenue Growth3% organic6% organic+300bps acceleration
Test & Measurement Revenue6% total, 2% organic10% total, 5% organic+300bps organic acceleration
Food Equipment Organic1% organic-3% organic-400bps decline
Automotive OEM Organic2% organic-1% organic-300bps decline but outperformed builds
Construction Organic-4% organic-1% organic+300bps improvement to 'best in 4 years'
Free Cash Flow GrowthNot specified6% growth, 69% conversionSolid but seasonal Q1 level

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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