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ITT Beats Q3 Forecast

WHITE PLAINS, N.Y. — ITT Corporation (NYSE: ITT) today reported 2010 third-quarter revenue of $2.6 billion and net income of $145 million, or $0.78 per share. Income from continuing operations was $12 million, or $0.07 per share. Excluding the impact of special items, income from continuing operations for the quarter was $200 million, or $1.08 per share, representing 6 percent year-over-year growth.

“Our outstanding results this quarter reflect strong revenue growth in our commercial businesses and excellent operating performance by our teams across the company. Our focused productivity and cost management programs more than offset the headwinds of higher commodity pricing and foreign exchange,” said Steve Loranger, ITT's chairman, president and chief executive officer. “We are seeing excellent order intake in our Defense & Information Solutions group, with some key strategic wins that we believe position us well for the future. Our Fluid Technology and Motion & Flow Control markets continue to strengthen across the majority of our product categories and geographic regions, and we continue to see strong performance in emerging markets.”

During the quarter, the company completed the acquisition of Godwin Pumps and announced plans to acquire O.I. Corporation and SRA International's Airport Operations Solutions group. The sale of CAS, Inc. was also completed in the third quarter.

“Our ongoing strategy to further align our business portfolio with macro growth trends is progressing nicely,” Loranger said. “We are very pleased that the investments we have made in the Fluid Technology business, including the acquisitions of the analytics business and Godwin Pumps, are exceeding our expectations; and we are expanding in important growth markets. Our balance sheet remains strong, and we believe we are very well positioned to continue to invest in our businesses while generating sustainable future earnings growth.”

Year-to-date cash from operations was $654 million. Free cash flow, representing cash from operations less capital expenditures, was $480 million; and the company projects it will exceed its full-year cash flow conversion target, which is 100 percent of income from continuing operations adjusted for non-cash special items.

In the third quarter of 2010, ITT completed its first annual review and update of its net asbestos liability and increased the balance to reflect recent data that point to higher expected net costs over the next 10 years. Third-quarter 2010 results reflect an after-tax charge of $198 million, or $1.07 per share, related to the net liability increase. Currently, this charge is not projected to materially impact the company€™s ten-year forecasted operating annual cash flows.

In addition, the company recognized an after-tax gain of $152 million, or $0.82 per share, from the divestiture of CAS, Inc. This gain partially offset the charge related to the net asbestos liability.

{complink 2843|ITT Corp.}

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