Illinois Tool Works Inc. stock fell Friday after it reported third-quarter fiscal 2025 results and narrowed its full-year guidance.

Revenue rose 2.3% year over year (Y/Y) to $4.06 billion, missing the street view of $4.08 billion. The company saw organic revenue growth of 1% Y/Y in the quarter.

Segment Revenue Highlights

Revenue grew 7.3% in the Automotive OEM segment, 2.5% in Food Equipment, 0.3% in Test & Measurement and Electronics, and 3.3% in Welding and 3.3% in Specialty Products segments.

Also Read: This Illinois Tool Works ( ITW ) Analyst Turns Bearish; Here Are Top 5 Downgrades For Thursday

The company posted earnings of $2.81 per share, versus $3.91 a year ago and above the consensus estimate of $2.71.

Profitability and Cash Flow

Operating income for the quarter increased 6% Y/Y to $1.1 billion.

The company’s operating margin improved 90 bps Y/Y to 27.4%, with enterprise initiatives contributing 140 bps and six out of seven segments showing expansion.

Operating cash flow stood at $1 billion, and free cash flow came in at $904 million.

During the quarter, the company bought back $375 million in shares and raised the dividend by 7% to an annualized payout of $6.44 per share.

Outlook

Anticipating supply chain disruptions caused by U.S. tariffs, Illinois Tool Works ( ITW ) narrowed its full-year profit outlook, Reuters reported.

The company has tightened its full-year 2025 GAAP EPS guidance to the range of $10.40-$10.50 (versus consensus of $10.40) from $10.35-$10.55 prior.

Illinois Tool Works ( ITW ) projected full-year 2025 sales between $16.057 billion and $16.375 billion (versus consensus of $16.076 billion).

The company projects overall revenue growth of 1% to 3%, with an organic growth of flat to 2%. This outlook reflects the current demand environment, assuming ongoing pricing and supply chain actions successfully offset tariff costs and incorporating current foreign exchange rates.

Operating margin is expected to be between 26% and 27%, with enterprise initiatives contributing 125 basis points or more.

Investors can gain exposure to the stock via Tidal Trust III VistaShares Target 15 USA Quality Income ETF and Honeytree U.S. Equity ETF ( BEEZ ) .

Price Action: ITW shares were trading lower by 4.82% to $245.02 at last check Wednesday.

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