ITW 10-Q: Q3 EPS $3.00, Margin 27.8%, and a New $148M IRS Tax Exposure
ITW sits 16% above its 52-week low of $238.82.
Summary
ITW's Q3 10-Q confirms $3.00 EPS and 27.8% operating margin, and newly discloses an IRS Notice of Deficiency covering about $218 million of assessed taxes and disallowed refunds that the company will contest.
Key Events · Earnings and Guidance · ITW
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Q3 EPS $3.00, Revenue $4.24B
Net income of $855 million and diluted EPS of $3.00 versus $2.81 a year ago; revenue rose 4.4% to $4,236 million, with organic growth of 3.8%.
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Operating Margin Expands to 27.8%
Operating income of $1,177 million was up 5.9%, with the 40 bps margin gain driven by 130 bps from enterprise initiatives and 80 bps of positive operating leverage.
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New IRS Deficiency Notice Disclosed
A September 2026 Notice of Deficiency assesses $23 million plus interest and penalties, disallows $47 million of refund claims, and flags $148 million of additional taxes for years after 2021; ITW intends to petition the U.S. Tax Court.
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Test & Measurement Leads Growth
The segment posted 15.8% organic revenue growth and a 28.7% operating margin, up 330 bps, on semiconductor and electronics demand.
Analysis · ITW · Technology
The headline numbers were already out on October 27, so the EPS beat and slight revenue miss are priced in. What is new here is the detail: operating margin expanded 40 bps to 27.8% on enterprise initiatives and positive leverage, and the Test & Measurement and Electronics segment grew organic revenue 15.8% with margins up 330 bps. The filing also discloses, for the first time, a September 2026 IRS Notice of Deficiency assessing $23 million plus interest and penalties, disallowing $47 million of refund claims, and flagging $148 million of additional taxes for years after 2021 — roughly $218 million of total exposure that ITW says it will challenge in Tax Court. Against $4.8 billion of trailing EBITDA and 1.9x debt/EBITDA, that is manageable, but it is a real cash contingency that was not in the market's hands yesterday.
How filings like this one have moved
In the 30 days to Oct 29, 2026, 31% of the 1656 measured filings Wiseek scored 7 moved their stock by 5% or more by the next session's close. The median move was -0.01%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, ITW was trading at $276.07 on NYSE in the Technology sector, with a market capitalization of approximately $78.6B. The 52-week trading range was $238.82 to $303.16. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.