ITT Corporation

ITT Industries Reports 2nd Quarter EPS of $0.70 - Up From $0.30

    7/21/1999

        - Net income is $63.3 million, up 72 percent from comparable $36.7 million
    
        - Margin expansion, earnings and revenue growth on track to meet stated
          long-term financial objectives
    
        WHITE PLAINS, N.Y., July 21 /PRNewswire/ -- ITT Industries, Inc.
    (NYSE: IIN) today reported second quarter 1999 diluted earnings per share
    (EPS) of $0.70, up $0.40 per share from the comparable figure in the second
    quarter 1998.  Net income for the quarter was $63.3 million, up 72 percent
    from the comparable $36.7 million in the quarter last year before
    non-recurring items.  Operating income from ongoing segments was
    $128.3 million, up $22.0 million excluding 1998 non-recurring items.  This 21
    percent increase is due to revenue growth and the impact of operating
    improvements, which expanded operating margins by 1.2 percentage points.
    Revenues for the quarter were $1.2 billion, up $66.4 million from the period
    last year.  Acquisitions and organic sales growth in the Defense and Specialty
    Products segments contributed to this 5.9 percent increase.
        "It is clear from these results that we are reaching the financial
    milestones we've set for ourselves in the key areas of margin expansion, and
    earnings and revenue growth," said Travis Engen, chairman and chief executive
    of ITT Industries.  "Through actions we began late last year and continue to
    take today, we are moving toward higher profitability and faster growth with
    greater financial flexibility to pursue attractive acquisition opportunities
    as they arise."
        At an Investor Conference held recently, Engen detailed multi-year growth
    objectives for the company.  Those objectives are revenue growth of
    8 to 10 percent per year, EPS growth of 14 to 16 percent per year, and segment
    operating margin expansion to 12 percent within the next four years.
        "About half of our revenue growth in the second quarter was in our ongoing
    businesses, and the remainder was attributable to acquisitions and one-time
    items," Engen said.  "Our margin expansion and EPS growth for the quarter are
    also in line to meet our objectives for 1999 and beyond."
        Engen said the company completed two acquisitions recently, HydroAir and K
    and M Electronics (the latter closed in the third quarter), that are
    indicative of the type of businesses in which the company will invest.  While
    relatively small (combined annual revenues of approximately $35 million), both
    enhance existing ITT Industries business units' operational strength and
    financial performance.
        "Acquisitions like these and others we have in the pipeline have one
    goal -- to enhance shareholder value," Engen said.  "Additionally, our
    recently announced strategic alliances in space imaging and voice recognition
    technology will give us opportunities to expand our presence in these high
    potential growth markets."
    
                                   Segment Results
    
        Connectors & Switches
        Operating margins in the Connectors & Switches segment during the second
    quarter jumped 3.3 percentage points over the period last year, reflecting
    operating improvements and cost saving measures that were implemented
    beginning in late 1998.  Operating income for the quarter was up $3.1 million
    over 1998, while segment sales were down $9.5 million to $123.8 million on
    continued weakness in military/aerospace and commercial aircraft segments.
    While some key end markets are expected to remain sluggish through the end of
    the year, ITT Industries expects new product introductions in Europe and North
    America, such as RF connectors and switches for mobile communication platforms
    and new designs for transportation applications, will help offset the decline.
    
        Defense Products & Services
        ITT Industries' Defense Products & Services segment saw operating income
    increase 7.4 percent, or $1.9 million, over the period last year, to
    $27.5 million.  Operating margin was down slightly due to product mix.  Second
    quarter revenues were up $65.8 million, or 21 percent, to $376.7 million, due
    primarily to a 16 percent increase in international sales, increased volume in
    the SINCGARS shipments and a $25 million settlement on a closed contract.
    While full year operating margin should remain about the same as in 1998,
    higher Avionics sales will help this segment deliver double-digit operating
    income growth for the year.
    
        Pumps & Complementary Products
        Significant operating improvements in the Pumps & Complementary Products
    segment over the last nine months helped push second quarter operating margins
    up 1.2 percentage points over last year.  Operating income for the quarter was
    up 11 percent, or $4.3 million, to $43.0 million.  Continued weakness in the
    segment's industrial end-use markets was partially offset by strengths in
    other market segments, including water and wastewater, and construction.  For
    the quarter, revenues were down 3 percent or $13.4 million to $441.3 million.
    
        Specialty Products
        ITT Industries' Specialty Products segment reported operating income up
    44.7 percent, or $12.7 million to $41.1 million, due primarily to increased
    sales volume and market share gains in the Fluid Handling Systems unit and
    significant cost reductions.  Revenues for the quarter were $246.8 million, up
    $32.4 million, or 15.1 percent, over the period in 1998.  Revenue growth in
    the segment was primarily driven by strong underlying market conditions,
    market share gains in the segment's Fluid Handling unit and growth in the
    Leisure Marine business.  Increased volume helped boost operating margins in
    the segment 3.5 percentage points over the 1998 period, and should fuel
    continued operating income gains and a year-over-year margin increase for
    1999.
    
                   ITT Industries Second Quarter Financial Results
                              (in millions, except EPS)
                                         1999                   1998*
    
        Total Sales and Revenues     $1,191.7                $1,125.3
    
        Operating Income
        from Ongoing Segments          $128.3                  $106.3
    
        Income from Continuing
         Operations                     $63.3                   $30.2
    
        Shares, Diluted                  90.8                   122.1
    
        Diluted EPS
        from Continuing Operations      $0.70                   $0.30
    
        *  1998 figures exclude non-recurring items of $6.5, after tax,
           or $0.05 per share.
    
        ITT Industries, Inc. (http://www.ittind.com) is a global engineering and
    manufacturing company with leading positions in the markets it serves,
    generating 1998 sales of $4.5 billion.  ITT Industries is the world's premier
    supplier of pumps, systems and services to move and control water and other
    fluids.  The company is a major supplier of sophisticated military defense
    systems, and provides advanced technical and operational services to a broad
    range of government agencies.  ITT Industries also produces connectors,
    switches and cabling used in telecommunications, computing, aerospace and
    industrial applications, as well as network services.  Further, ITT Industries
    makes industrial components for a number of other markets, including
    transportation, construction and aerospace.  Based in White Plains, NY, ITT
    Industries employs approximately 33,000 people around the world.
        In addition to the New York Stock Exchange, ITT Industries' common stock
    is traded 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, 1998, and other of its filings with the
    Securities and Exchange Commission.
    
    SOURCE  ITT Industries, Inc.
    
    

    Web site: http://www.ittind.com
    Company News On-Call: http://www.prnewswire.com/comp/110006.html
    or fax, 800-758-5804, ext. 110006
    CONTACT: Tom Glover of ITT Industries, 914-641-2160, or
    tglover@hq.ittind.com

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.

Investors

Jason Moss
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jason.moss@itt.com

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Laurent Lawrence
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