ITT Corporation

ITT Industries Reports Net Income Up 25.5 Percent in First Quarter -- Diluted EPS of $0.46 up 24.3 percent over 1997 period

    4/21/1998

        WHITE PLAINS, N.Y., April 21 /PRNewswire/ -- ITT Industries, Inc.
    (NYSE: IIN) today reported first quarter 1998 net income of $55.6 million, up
    25.5 percent over the period in 1997.  Diluted EPS was $0.46, up $0.09 per
    share, or 24.3 percent, from the $0.37 per share reported last year.
    Operating income from ongoing segments reached $140.6 million, up 14.3 percent
    or $17.6 million over the 1997 figure. Total sales of $2.14 billion were down
    slightly from the period last year due to divestitures and foreign currency
    translation.
        "Our double digit earnings growth is a direct reflection of the positive
    actions we've taken to improve performance over the last two years," said
    Travis Engen, chairman, president and chief executive.  "The profit
    improvement plan within automotive is progressing on schedule and is
    consistent with our overall effort to earn higher returns in all of our
    business units.  The assimilation of Goulds Pumps is complete within fluid
    technology, with synergies being achieved.  Businesses within our Defense &
    Electronics unit also continue to perform well."
        "The strategic review of our two major automotive businesses is proceeding
    on schedule," Engen added.  "As the review has progressed, management and
    our financial advisors have refined the review to include our automotive
    switch business (approximate annual sales - $275 million).  We believe this
    inclusion creates the best combination of synergies.  Under our current
    schedule, we expect to announce the results of the review this summer.  I
    am confident that this process will result in a stronger, more profitable
    company."
        The strategic review does not include the automotive fluid handling,
    friction and shock absorber businesses.
        During the first quarter, ITT Industries realized a one-time pre-tax gain
    of $20 million from the sale of its Precision Die Casting (PDC) business,
    which closed on January 26, 1998.  Also in the first quarter, the company
    recorded non-cash reserves of a comparable amount for anticipated legal
    expenses and losses on divestitures of non-core businesses, and other
    items.
    
                               Primary Business Results
    
        Automotive
    
        The automotive business recorded first quarter operating income of $75.5
    million, up $1.5 million or 2 percent over the first quarter 1997, due
    primarily to manufacturing cost reductions and increased sales volume.
    This operating income figure does not include the one-time gain from the
    sale of PDC.  Sales for the quarter were $1.19 billion, down 14.4 percent
    from the period last year, more than accounted for by divestitures and
    foreign currency translation. The automotive business realized a margin
    increase of 1.0 percentage point for the quarter, evidence of the successful
    implementation of the profit improvement program.  During the quarter, the
    automotive business began production on its new Electronic Stability Program
    (ESP) for several manufacturers.  The company has recently received North
    American contracts with a total annual value of more than $500 million for
    brake and chassis systems starting in model year 1998, including a contract to
    supply four-wheel anti-lock brakes systems (ABS) for Toyota's T150 pickup
    trucks.
    
        Defense & Electronics
    
        The defense & electronics (D&E) business' operating income rose 19.5
    percent to $30.0 million, on sales of $473.6 million.  D&E's operating
    margin improved by 0.2 percentage points.  Sales rose 15.7 percent from the
    period in 1997 due primarily to increased international sales and the
    acquisition of the high technology services unit Kaman Sciences, now called
    ITT Systems & Sciences, in the fourth quarter last year.  In the defense
    area, the company announced new contracts with eight foreign nations for
    its military tactical radio system, known as Single Channel Ground and
    Airborne Radio System (SINCGARS), totaling $48.3 million.  Defense also had
    double-digit sales increases in Night Vision and Avionics, while its
    GaAsTek (Gallium Arsenide) unit's sales more than doubled over the first
    quarter 1997.  In the electrical connectors business, ITT Cannon's
    operating margin increased 0.4 percentage points due to cost reduction
    activities.  The company's position in the mobile communications market was
    strengthened by Alcatel's decision to select Cannon connectors for the next
    generation of mobile telephones.
    
        Fluid Technology
    
        The fluid technology business reported first quarter operating income of
    $35.1 million, up 46.9 percent from the same period last year.  First
    quarter sales of $472.4 million were up 53.6 percent resulting from the
    acquisition of Goulds Pumps in the second quarter of 1997.  While the
    Industrial Pump Group is experiencing some market softness and demand is
    down in Asia-Pacific, the business overall continues to grow market share
    and has instituted a profit assurance program to control expenses.  The
    integration of Goulds' operations is now complete, with all units
    generating significant synergy orders at an annualized rate of more than
    $50 million.  During the quarter, the company received a $14 million pump
    contract for a flood control project in Jefferson Parish, Louisiana.  The
    fluid technology business also reached an agreement to sell its Barton
    controls unit during the first quarter and closed the transaction on
    April 14,1998.
    
                    ITT Industries First Quarter Financial Results
                               (in millions except EPS)
    
                                                      1998(a)             1997
    
        Total Sales                                $2,143.5            $2,166.6
    
        Operating Income from ongoing segments       $140.6              $123.0
    
        Net Income                                    $55.6               $44.3
    
        Shares Diluted                                121.6               120.6
    
        Diluted EPS                                   $0.46                $0.37
    
    
        (a) 1998 figures exclude $20 million pre-tax gain on sale of Precision Die
    Casting business and other one-time items.
        ITT Industries (http://www.ittind.com) is a leading global diversified
    manufacturing company, with 1997 sales of $8.8 billion in its three primary
    business segments: Automotive, Defense & Electronics, and Fluid Technology.
    ITT Industries' automotive business is one of the world's largest independent
    suppliers of systems and components to automotive manufacturers.  In the
    defense & electronics area, ITT Industries is a leader in the design,
    manufacture and support of high technology electronic systems and components,
    including Night Vision, tactical communications and mobile telecommunications.
    In fluid technology, ITT Industries is the world's leading manufacturer of
    pumps, systems and services for the movement, measurement and control of
    fluids.  Headquartered in White Plains, NY, ITT Industries employs more than
    58,000 people around the world.
        In addition to the New York Stock Exchange, ITT Industries' common stock
    is traded under the symbol ("IIN") on the Midwest, Pacific, London, Frankfurt
    and Paris exchanges.
        Certain material presented herein consists of forward-looking statements
    which involve known and unknown risks, uncertainties and other important
    factors that could cause actual results to differ materially from those
    expressed in or implied from such forward-looking statements.  Such factors
    include those set forth in Item 1.  Business and Item 7.  Management's
    Discussion and Analysis of Financial Condition and Results of
    Operations - Forward-Looking Statements in the ITT Industries, Inc. Form 10-K
    Annual Report for the fiscal year ended December 31, 1997, and other of its
    filings with the Securities and Exchange Commission.
        ITT Industries and its subsidiaries' news releases are available at no
    charge via fax and the Internet.  For ITT Industries news and information
    on the Internet, visit http://www.ittind.com.  To receive releases by fax,
    call 800-758-5804, extension 110006.
    
    SOURCE  ITT Industries, Inc.
    
    

    Web site: http://www.ittind.com
    CONTACT: Tom Glover of ITT Industries, 914-641-2160

About ITT

ITT is a diversified leading manufacturer of highly engineered critical components and customized technology solutions for the transportation, industrial, and oil and gas markets. Building on its heritage of innovation, ITT partners with its customers to deliver enduring solutions to the key industries that underpin our modern way of life. ITT is headquartered in White Plains, N.Y., with employees in more than 35 countries and sales in a total of approximately 125 countries. The company generated 2016 revenues of $2.4 billion.

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