- Fourth-quarter earnings from continuing operations up 10 percent to $1.06 per share, with revenue of $2.9 billion. Adjusted earnings from continuing operations up 18 percent to $0.97 per share.
- Full-year 2009 earnings from continuing operations of $3.54 per share, with revenue of $10.9 billion. Adjusted earnings from continuing operations of $3.78 per share.
- Record 2009 cash from operations of $1.3 billion and free cash flow of $1.1 billion, a 146 percent conversion of income from continuing operations adjusted for non-cash special items.
- Adjusted earnings per share 2010 guidance raised to a range of $3.90 to $4.10.
WHITE PLAINS, N.Y., February 3, 2010 — ITT Corporation (NYSE: ITT) today reported 2009 fourth-quarter revenue of $2.9 billion and income from continuing operations of $196 million, or $1.06 per share. Excluding special items, income from continuing operations for the quarter was $178 million, or $0.97 per share, representing 18 percent year-over-year growth, as productivity benefits and lower restructuring costs more than offset lower volumes.
For the full year 2009, ITT reported revenues of $10.9 billion and income from continuing operations of $651 million, or $3.54 per share. Excluding special items, income was $696 million, or $3.78 per share. For the full year, free cash flow, representing cash from operations before a net discretionary pension contribution and less capital expenditures, was $1.1 billion, a 146 percent conversion of income from continuing operations adjusted for non-cash special items.
"The strength of our well-balanced portfolio enabled us to achieve EPS performance that was best in class for our multi-industry peer group. We are very proud of our teams around the globe for delivering on our commitments. We took important steps intended to position the company for the long term by increasing our strategic investments and accelerating our productivity initiatives while continuing to generate strong free cash flow to invest in our future," said Steve Loranger, ITT's chairman, president and chief executive officer.
The company also raised its full-year 2010 adjusted earnings per share guidance from its previously announced forecast of $3.85 to $4.05 to a new forecast of $3.90 to $4.10.
"We believe our innovative and essential products and services position us well to grow at or above the markets we serve. We saw this play out in 2009 with many key customer wins, and our outstanding achievements in operational excellence enable our confidence to raise our outlook for growth in 2010," said Loranger. "For the long term, we believe we have the right strategies in place to grow organically while we invest for our future — in categories that are adjacent to our core businesses and in emerging markets that will drive sustainable growth."
2009 Fourth-Quarter and Full-Year Business Segment Results
ITT Defense & Information Solutions (formerly Defense Electronics & Services)
- Fourth-quarter 2009 revenue for the Defense segment was $1.6 billion, down one percent compared to the year-ago period, as lower tactical radio volumes offset growth in service contracts and international Night Vision revenues. Fourth-quarter operating income for the segment grew to $207 million, up 10 percent on a comparable basis, driven by strong productivity actions.
- Full-year 2009 revenue for the segment was flat compared with 2008 at $6.3 billion. For the full year, operating income for the segment was $776 million, a seven percent improvement year-over-year, driven by productivity actions.
- At the close of 2009, the Defense segment had a funded backlog of $5.2 billion that was nearly flat to the prior year with little change in the mix of products and services.
- During the first quarter of 2010, ITT announced a strategic realignment of its Defense segment to enable stronger portfolio positioning to accelerate new technology development in systems and solutions, achieve a more coordinated market approach, and reduce operational redundancies. The company's Defense Electronics & Services segment was renamed ITT Defense & Information Solutions. Its previous organizational structure, comprising seven separate business units, will be consolidated into three stronger technology platforms in 2010: Electronic Systems, Geospatial Systems and Information Systems.
Fluid Technology
- ITT's Fluid Technology segment reported fourth-quarter 2009 revenue of $924 million, down six percent on a year-over-year basis, and a 13 percent decline in organic revenue (defined as total revenue excluding the impacts of foreign exchange and acquisition and divestiture activity), due primarily to global weakness in Residential and Commercial Water and lower revenues in North America from the Industrial Process business that offset continued strength in the municipal market. Fourth-quarter segment operating income was $104 million, up nine percent from the comparable prior-year period, driven by strong productivity, lower restructuring and realignment costs and favorable foreign exchange that more than offset lower volume.
- For the full year, the segment revenue declined 12 percent to $3.4 billion, and organic revenue was down nine percent as stability in municipal markets was offset by declines in industrial, residential and commercial markets. The segment generated operating income of $393 million, down 16 percent on a comparable basis, as a result of lower volume and higher pension expense, partially offset by strong productivity and lower realignment costs.
Motion & Flow Control
- Fourth-quarter 2009 revenue for the Motion & Flow Control segment grew two percent on a comparable basis to $332 million. Organic revenue was down one percent, as growth driven by the European auto stimulus, solid rail growth in emerging markets, and growth in beverage were offset by declines in the aerospace and industrial markets. The segment reversed a year-ago loss with fourth-quarter operating income of $17 million, driven by strong productivity and lower realignment costs.
- Full-year 2009 revenue for the segment was $1.3 billion, down 21 percent compared with the prior year. Organic revenue was down 14 percent, as a result of general weakness in industrial markets, which was partially offset by market share gains in automotive and beverage. For the year, operating income was down 38 percent to $118 million, as a result of lower volumes, lower foreign exchange and higher pension expense, which together offset significant productivity benefits and lower realignment costs.
Investor Call Today
ITT's senior management will host a conference call for investors today at 9:00 a.m. Eastern Standard Time to review fourth-quarter and full-year 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/investors.
About ITT Corporation
ITT Corporation is a high-technology engineering and manufacturing company operating on all seven continents in three vital markets: water and fluids management, global defense and security, and motion and flow control. With a heritage of innovation, ITT partners with its customers to deliver extraordinary solutions that create more livable environments, provide protection and safety and connect our world. Headquartered in White Plains, N.Y., the company generated 2009 revenue of $10.9 billion. www.itt.com
Safe Harbor Statement
Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 ("the Act"). These forward-looking statements include statements that describe the Company's business strategy, outlook, objectives, plans, intentions or goals, and any discussion of future operating or financial performance. Whenever used, words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target" and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements are uncertain and to some extent unpredictable, and 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. Factors that could cause results to differ materially from those anticipated include: Economic, political and social conditions in the countries in which we conduct our businesses; Changes in government defense budgets; Decline in consumer spending; Sales and revenues mix and pricing levels; Availability of adequate labor, commodities, supplies and raw materials; Interest and foreign currency exchange rate fluctuations; Competition and industry capacity and production rates; Ability of third parties, including our commercial partners, counterparties, financial institutions and insurers, to comply with their commitments to us; Our ability to borrow or refinance our existing indebtedness and availability of liquidity sufficient to meet our needs; Acquisitions or divestitures; Personal injury claims; Uncertainties with respect to our estimation of asbestos liability exposure and related insurance recoveries; Our ability to effect restructuring and cost reduction programs and realize savings from such actions; Government regulations and compliance therewith; Changes in technology; Intellectual property matters; Governmental investigations; Potential future employee benefit plan contributions and other employment and pension matters; Contingencies related to actual or alleged environmental contamination, claims and concerns; Changes in generally accepted accounting principles; Other factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and our other filings with the Securities and Exchange Commission.
The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Press Contact:
Jenny Schiavone
tel +1 914 641 2160
jennifer.schiavone@itt.com
Investor Contact:
Thomas Scalera
tel +1 914 641 2030
thomas.scalera@itt.com