GLENVIEW, Ill. -- Illinois Tool Works Inc. on Tuesday reported its second quarter 2022 results.
Second quarter revenue of $4 billion increased 9% with organic revenue growth of 10%. The acquisition of MTS contributed 3% to revenue; unfavorable foreign currency translation reduced revenue by 4%. Six of seven segments delivered positive organic growth in the quarter, led by Food Equipment, up 25%, Welding, up 22%, Construction Products up 15%, Polymers & Fluids up 10%, Automotive OEM up 6%, and Test & Measurement and Electronics up 1% due to a difficult year-over-year comparison. Specialty Products organic revenue was down less than 2%. On a geographic basis, organic growth was 14% in North America, 6% in Europe, and 3% in Asia Pacific.
GAAP EPS was $2.37 and included $(0.05) of higher restructuring expenses related to 80/20 front-to-back projects, $(0.10) of unfavorable foreign currency translation, and a $0.16 one-time tax benefit related to the routine resolution of a U.S. tax audit. As a reminder, GAAP EPS of $2.45 in the second quarter of 2021 included a $0.35 one-time tax benefit.
Operating margin was 24.1% excluding margin dilution impacts of (50) basis points each from the MTS acquisition and higher restructuring expenses. Enterprise initiatives contributed 90 basis points. Price/cost margin dilution impact moderated in the second quarter to (160) basis points compared to (250) basis points in the first quarter of 2022. Operating cash flow was $501 million, and free cash flow was $420 million with a conversion rate of 57 percent. The reported tax rate for the second quarter was 18.3% and excluding the one-time tax benefit, the effective tax rate was 23.9%.
“In the current environment, our teams around the world continue to do an exceptional job of demonstrating the power and resilience of the ITW business model as evidenced by the more than 10% organic growth and 23 percent plus operating margin that they delivered in the second quarter,” said Chairman and CEO E. Scott Santi. “Across the company we continue to leverage our 80/20 front-to-back driven operational capabilities to support our customers and execute our 'Win the Recovery' strategy to accelerate profitable market penetration and organic growth across our portfolio.
"Looking ahead at the remainder of 2022, based on our first half results and current levels of demand, we are maintaining our current guidance for full-year 2022, including organic growth of 8.5 percent and record GAAP EPS of $9.20 at their respective mid-points. While the near-term environment has its challenges, we remain focused on delivering differentiated service to our customers, top-tier financial performance for our shareholders, and continued progress on our path to ITW’s full potential performance.”