GLENVIEW, IL – Illinois Tool Works reported its test & measurement and electronics unit had fourth quarter revenue of $534 million, down 3.3% year-over-year. Operating income for the segment was $153 million, a decrease of 1.3% compared to the same quarter in 2019.

The electronics unit’s 2020 revenue was $1.96 billion, down 6.5% year-over-year, and operating income was $507 million, a decrease of 6.5%.

ITW’s total fourth quarter revenue was $3.5 billion, up 0.2% year-over-year. Organic revenue declined 0.9%; divestitures reduced revenue 0.7%, and foreign currency translation impact was favorable by 1.8%.

Operating income increased 7% to $883 million compared to the fourth quarter of 2019. Free cash flow was $705 million, 110% of net income.

Full year revenue was $12.6 billion, down 10.9%. Organic revenue for 2020 declined 9.8%; divestitures reduced revenue 0.9%, and foreign currency translation impact was unfavorable by 0.2%.

Free cash flow was $2.6 billion, 122% of net income.

The company repurchased $706 million of its own shares and raised its dividend 7% in August to an annualized $4.56 per share. The effective tax rate for the full year was 22% percent.

“The ITW team closed out 2020 with another quarter of strong execution and financial performance, generating revenue of $3.5 billion and delivering all-time record fourth quarter operating income, operating margin, and ROIC performance,” said E. Scott Santi, chairman and CEO.

“Looking back at 2020 in its entirety, our people around the world provided another meaningful demonstration of the power of the ITW business model and the differentiating value of our decentralized entrepreneurial culture in how the company responded to the unprecedented events and challenges of the past year. While it was the unique circumstances we faced and our response to them that defined the year, it was the sum total of all the ITW team has built over the last eight years through the execution of our enterprise strategy that gave us the capabilities and options to respond as we did. In the face of a global pandemic, our ability to deliver strong operational and financial performance, while remaining fully invested in the execution of our long-term enterprise strategy, provides further evidence ITW is a company that has the enduring competitive advantages, resilience, and agility necessary to deliver consistent top-tier performance in any environment and over the long term. I offer my heartfelt thanks to all my ITW colleagues for their dedication and commitment to keeping their coworkers safe, serving our customers with excellence, and continuing to make progress on our path to ITW’s full-potential performance.”

For 2021, the company expects organic growth in the range of 7% to 10%. Revenue is expected to grow in the range of 9% to 12%, as foreign currency translation at current exchange rates is projected to increase revenues approximately 2%.

Free cash flow is expected to be greater than 100% of net income. The company plans to repurchase approximately $1 billion of its shares in 2021 and expects an effective tax rate in the range of 23% to 24%.

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