GLENVIEW, IL – Illinois Tool Works reported first quarter test & measurement and electronics revenue was $552 million, an increase of 13.8% year-over-year and 3.4% sequentially. Organic growth was up 11%.

Operating income for the segment was $157 million, up 29.8% compared to the first quarter of 2020 and 2.6% sequentially.

ITW posted total first quarter revenue of $3.5 billion, up 10% year-over-year.

Organic revenue grew 6%, or 8% when equalizing for one less shipping day in 2021 versus 2020, and foreign currency translation impact was favorable by 4%. The test & measurement and electronics unit accounted for 10.7% of the firm’s organic revenue.

Operating income increased 19% to $905 million. Free cash flow was $541 million, 81% of net income and in line with typical seasonality.

“We saw continued improvement in the demand environment across a broad cross section of our business portfolio in the first quarter and our teams around the world responded,” said E. Scott Santi, chairman and CEO of ITW. “The combination of the Win the Recovery actions we initiated over the course of the past year, the foundational strength of ITW’s 80/20 front-to-back business system, and our continuing progress in executing our long-term enterprise strategy allowed us to meet our customers’ increasing needs, while delivering excellent profitability leverage, as evidenced by our 19% earnings growth, 45% incremental margins, and 120 basis points of margin benefit from enterprise initiatives in the quarter. While a number of significant issues and uncertainties remain on the path to recovery from the Covid-19 pandemic globally, I am confident ITW is well positioned to both seize the opportunities and deal with the challenges that lie ahead as we move through the balance of 2021.”

For 2021, ITW expects organic growth in the range of 10 to 12%. Revenue is expected to grow in the range of 12 to 14%, as foreign currency translation at current exchange rates is projected to increase revenue 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 and expects an effective tax rate of 23 to 24%. Guidance excludes any impact from the previously announced acquisition of the MTS Test & Simulation business.

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