Illinois Tool Works
Q3 2022 Earnings Call
Oct 25, 2022, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the ITW third quarter earnings conference call. [Operator instructions] Thank you.
Karen Fletcher, vice president of investor relations, you may begin your conference.
Karen Fletcher -- Vice President, Investor Relations
OK. Thank you, Rob. Good morning, and welcome to ITW's third quarter 2022 conference call. I'm joined by our chairman and CEO, Scott Santi; and senior vice president and CFO, Michael Larsen.
During today's call, we will discuss ITW's third quarter financial results and our updated guidance for full year 2022. Slide 2 is a reminder that this presentation contains forward-looking statements. We refer you to the company's 2021 Form 10-K and subsequent reports filed with the SEC for more detail about important risks that could cause actual results to differ materially from our expectations. This presentation uses certain non-GAAP measures, and a reconciliation of those measures to the most directly comparable GAAP measures is contained in the press release.
Please turn to Slide 3, and it's now my pleasure to turn the call over to our chairman and CEO, Scott Santi.
Scott Santi -- Chairman and Chief Executive Officer
Thanks, Karen, and good morning, everyone. In what remains a very dynamic and challenging operating environment, we were pleased with our Q3 performance. On the top line, we delivered 13% revenue growth with 16% organic growth from our base businesses. While we did see some softening in channel inventory reduction actions in our businesses serving the construction, auto aftermarket, commercial welding and appliance markets, five of our seven segments delivered double-digit organic growth, led by automotive OEM up 25% and food equipment up 23%.
With regard to margins, we were glad to see our incremental margins in Q3 return to our normal 30%-plus level for the first time in five quarters as the impact of volume growth, enterprise initiatives, pricing actions and some moderation in the pace of input cost inflation drove incremental margin of 39% and a 130-basis-point improvement in operating margin in our base businesses. We've lost roughly 250 basis points of margin due to price cost during this period of rapid inflation, which we fully expect to recover over time once the current inflationary environment stabilizes. And it was certainly good to see a nice solid first step in that direction in Q3. On the bottom line, strong growth and margin performance resulted in GAAP EPS of $2.35, up 16% versus Q3 of last year.