ITW(ITW) - 2025 Q1 - Quarterly Results

Revenue Performance - First quarter 2025 revenue was $3.8 billion, a decline of 3.4$10.15 to $10.55 per share, expecting revenue and organic growth of 0$2.38, a decrease of 2% compared to the previous year, impacted by $0.10 from higher restructuring expenses and unfavorable foreign currency translation[6] - The company reported a decline in net income to$700 million for Q1 2025, compared to $819 million in Q1 2024[13] - Net income for Q1 2025 was$700 million, down 14.5% from $819 million in Q1 2024[21] - Operating income after taxes for Q1 2025 was$722 million, compared to $773 million in Q1 2024, reflecting a decrease of 6.6$592 million, with free cash flow at $496 million, representing a conversion rate of 71$1.5 billion of its own shares[7] - Free cash flow for Q1 2025 was $496 million, slightly up from$494 million in Q1 2024, with a conversion rate of 71%[27] - The company reported a net cash provided by operating activities of $592 million for Q1 2025, compared to$589 million in Q1 2024[27] Tax and Effective Rate - The effective tax rate for Q1 2025 was 21.7%, including a discrete tax benefit of $21 million related to the reversal of valuation allowances[6] - The effective tax rate for Q1 2025 was reported at 21.7$21 million[22] Assets and Liabilities - Total current assets increased to $6.037 billion as of March 31, 2025, compared to$5.856 billion at the end of 2024[15] - The company’s total liabilities increased to $12.226 billion as of March 31, 2025, from$11.750 billion at the end of 2024[15] Investment Metrics - Total invested capital increased to $10,632 million in Q1 2025 from$10,387 million in Q1 2024, representing a growth of 2.4%[21] - The net income to average invested capital for Q1 2025 was 26.9%, down from 32.0% in Q1 2024[21] - Average invested capital for Q1 2025 was $10,432 million, an increase from$10,249 million in Q1 2024[21] - The after-tax return on average invested capital for the twelve months ended December 31, 2024, was 31.2%[24] Accounting Changes - The cumulative effect of the change in inventory accounting method in Q1 2024 had a pre-tax impact of $117 million, or$88 million after-tax[21] Operating Margin - Operating margin for Q1 2025 was 24.8%, down 60 basis points year-over-year, with enterprise initiatives contributing 120 basis points[6]