ITT Announces Solid Results for 2013 First Quarter

Thursday, 2 May 2013

2012 Full-Year Highlights from Continuing Operations

• Revenue grew 7 percent to $608 million, including 11 percent growth in emerging markets, with organic revenue up 2 percent
• GAAP earnings from continuing operations increased to $0.20 per share
• Adjusted earnings from continuing operations increased 21 percent to $0.47 per share
• Adjusted segment operating margins expanded by 130 basis points
• 2013 guidance maintained ; full-year adjusted earnings in the range of $1.80 to $1.90 per share, total revenue growth of 9 to 11 percent

 

WHITE PLAINS, N.Y., May 2, 2013 – ITT Corporation (NYSE: ITT) today reported that first-quarter 2013 revenue grew by 7 percent to $608 million, including 11 percent growth in emerging markets and solid 2 percent organic growth (defined as total revenue excluding foreign exchange, acquisitions and divestitures). Revenue results reflect gains in key global end markets including energy and transportation, and a solid performance from the recently acquired Bornemann Pumps business.

On a GAAP basis, segment operating margins were flat year-over-year. Adjusted segment operating margins, which exclude special items, expanded by 130 basis points, reflecting net operating productivity and expanded sourcing initiatives partially offset by the Bornemann Pumps operations and the funding of strategic investments.

First-quarter GAAP earnings from continuing operations increased to $0.20 per share. Adjusted earnings from continuing operations, which excludes special items, increased 21 percent to $0.47 per share, reflecting stronger operational performance, improved volumes and favorable mix.

“ITT is executing at a high level early in 2013 as we continued to make meaningful progress against our key drivers of profitable growth and value creation,” said Denise Ramos, chief executive officer and president. “We continued our consistent market expansion by achieving strong growth in emerging markets, winning share in a tough Western European environment and enhancing our presence in key global end-markets such as energy and automotive.

“We also are seeing the results of our effective capital deployment as we drive key customer-focused strategic actions such as expanding our automotive capabilities in China and successfully integrating Bornemann. At the same time, our focus on operational excellence is helping us improve margins, productivity and key customer metrics such as on-time delivery. All of these efforts position us well to continue to deliver results during this period of continuing uncertainty in the global economic environment.”

The company also repurchased $46 million of ITT common stock in the first quarter under its recently announced $75 million share repurchase program.

2013 First-Quarter Business Segment Results

All results are compared with the prior-year first quarter

Industrial Process designs and manufactures industrial pumps and valves for the oil and gas, chemical, mining and industrial markets.

• 2013 first-quarter revenue was up 14 percent to $257 million. The increase reflects a 28 percent increase in organic global oil and gas shipments, as well as the impact from the company’s successful acquisition of Bornemann Pumps, partially offset by mining declines in emerging markets. Organic revenue was flat compared to the prior year.
• Adjusted operating income increased 19 percent to $27 million, reflecting strong operating productivity and favorable sales mix that was partially offset by Bornemann Pumps impacts and the recent currency devaluation in Venezuela.

 

Motion Technologies designs and manufactures braking technologies and shock absorbers for the automotive and rail markets.

• 2013 first-quarter total and organic revenue increased 7 percent to $193 million driven by significant share gains in the global automotive brake pad market. The revenue results, which reflected a 24 percent increase in the United States, 20 percent growth in emerging markets and 3 percent growth in difficult Western European automotive markets, were partially offset by weakness in the global rail shock absorber market.
• Adjusted operating income increased by 22 percent to $33 million. The gain reflects volume increases, favorable sales mix and net operating productivity, partially offset by pricing and start-up costs related to a new production and research facility in Wuxi, China.

 

Interconnect Solutions designs and manufactures connectors and interconnects for the aerospace, industrial and transportation markets.

• 2013 first-quarter total revenue for Interconnect Solutions decreased 2 percent to $91 million, as gains in general industrial and oil and gas connectors were offset by weakness in European aerospace, transportation and communication connectors. Organic revenue declined 1 percent.
• Adjusted operating income was $3 million, a 29 percent increase, as net operating productivity and restructuring savings were partially offset by unfavorable sales mix and lower volumes.

 

Control Technologies designs and manufactures products including fuel management, actuation, and noise and energy absorption components for the aerospace and industrial markets.

• First-quarter total and organic revenue decreased 2 percent to $69 million as growth in North American and European aerospace was offset by declines related to the fulfillment of an aerospace program and weakness in the global general industrial and defense markets.
• Adjusted operating income increased 8 percent to $14 million, as net operating productivity and impacts from pricing initiatives were only partially offset by unfavorable sales mix and volume.

 

Guidance

The company maintains its guidance for full-year 2013 adjusted earnings in the range of $1.80 to $1.90 per share. Total revenue is expected to grow 9 to 11 percent, and adjusted segment operating margin is expected to grow 50 basis points.

Investor Call Today

ITT's senior management will host a conference call for investors today at 9 a.m. EDT to review performance and answer questions. The briefing can be monitored live via webcast at the following address on the company's Web site: www.itt.com.

For a reconciliation of GAAP to non-GAAP results, please visit the company’s Web site.