Illinois Tool Works Inc. (NYSE: ITW) today reported its third quarter 2020 results.
The company, out of Glenview, Illinois, reported Friday, third-quarter revenue of $3.3 billion declined 4.9% compared to the prior year period as organic revenue declined 4.6%.
Divestitures reduced revenue by 1%,, partially offset by a foreign currency translation benefit of 0.7%. Product Line Simplification reduced revenue by 30 basis points.
Operating margin was 23.8% compared to 25% in the prior year period as the lower volume impact and higher restructuring expenses were partially offset with benefits from Enterprise Initiatives of 120 basis points. Six of seven segments delivered operating margin above 20%.
GAAP earnings per share proved $1.83 compared to $2.04 in the prior year period. Free cash flow was $631 million, 108% of net income. After-tax return on invested capital improved to 29.6% compared to 29.2% in the prior year period. The effective tax rate was 21.3%.
On May 5, ITW suspended annual guidance for 2020 due to uncertainties regarding the duration and severity of the COVID-19 pandemic. On August 7, ITW raised its dividend 7% to an annualized $4.56 per share.
Said CEO Scott Santi, "We saw solid recovery progress in many of the end markets we serve in the third quarter as evidenced by our revenue being up sequentially 29% versus second quarter. Our people around the world responded by leveraging our proprietary business model to provide excellent service to our customers while keeping themselves and their co-workers safe."
ITW shares took on $2.16, or 1.1%, to $203.91.
