- First-quarter revenue grew to $577 million, including a 9 percent increase in organic revenue
- Emerging market revenue grew 22 percent
- North American revenue grew 11 percent
- Earnings from continuing operations increased to $0.11 per share compared with a prior-year loss of ($0.23) per share
- Adjusted earnings from continuing operations totaled $0.39 per share
- 2012 guidance maintained
WHITE PLAINS, N.Y., May 4, 2012 — ITT Corporation (NYSE: ITT) today reported first-quarter 2012 revenue of $577 million, including 9 percent growth in organic revenue (defined as total revenue excluding foreign exchange, acquisition and divestiture impacts) compared with the 2011 first quarter.
Revenue results included 22 percent growth in emerging markets and 11 percent growth in North America, as well as gains in core markets such as oil and gas, mining, chemical and general industrial.
On a GAAP basis, earnings from continuing operations increased to $0.11 per share compared with a loss of ($0.23) per share in the prior-year first quarter. Adjusted earnings from continuing operations, which excludes special items, totaled $0.39 per share compared with pro forma adjusted earnings of $0.45 per share in the first quarter of 2011. The decrease partially reflects lower segment operating income due to post-spin incremental recurring costs, expected lower connectors volume, and increased large project mix in the Industrial Process business.
"In the first quarter, ITT delivered strong revenue growth and made investments that will provide the foundation for additional future growth, including expanding our automotive facility in Wuxi, China, and investing to support our other key drivers of profitable growth, including premier customer experience, aftermarket expansion, and technical and operational excellence," said CEO and President Denise Ramos.
"Our results also reflect the advantage we gain as a global industrial company from our portfolio that is balanced and diversified across end markets, business cycles and geographies. We saw the benefits in the first quarter as our global growth in the oil and gas, mining and automotive markets offset expected lower volumes in the connectors market. In addition, despite overall market softness in Western Europe, we drove strong growth globally, particularly in North America, Asia and the Middle East. We believe that going forward our business model will position us well to continue building our track record of growth and value creation."
The company also deployed capital to buy back 1.55 million shares of ITT common stock under its authorized share repurchase program and contributed $32 million, including a $15 million discretionary contribution, to its various U.S. pension plans.
2012 First-Quarter Business Segment Results
Industrial Process
Industrial Process designs and manufactures industrial pumps and valves for the oil and gas, chemical, mining and industrial markets.
- 2012 first-quarter revenue was up 35 percent to $226 million, reflecting an increase in project shipments across all regions and markets, particularly in Latin America where revenue increased 71 percent. First-quarter revenue included $7 million from Industrial Process' Blakers Pump Engineers, which ITT acquired in October 2011.
- Organic revenue was up 30 percent compared to the prior year.
- Adjusted operating income for the segment in the first quarter was $23 million, a 7 percent year-over-year increase, driven by increased volume and strong operating productivity partially offset by negative project mix shift and post-spin incremental recurring costs.
Motion Technologies
Motion Technologies designs and manufactures braking technologies and shock absorbers for the automotive and rail markets.
- 2012 first-quarter revenue declined 2 percent to $180 million. However, organic revenue increased 2 percent, driven by share gains in Europe and growth in emerging markets and North America in automotive, which was offset by weakness in the shock absorbers product lines.
- Adjusted operating income for the business in the first quarter of 2012 was $27 million, a 1 percent decrease compared with the prior-year quarter, reflecting negative foreign exchange impacts, start-up costs for our Wuxi, China, facility, and higher commodity costs, partially offset by operating productivity gains.
Interconnect Solutions
Interconnect Solutions designs and manufactures connectors and interconnects for the aerospace, industrial and transportation markets.
- 2012 first-quarter revenue for Interconnect Solutions decreased 14 percent to $93 million, driven primarily by general weakness in the global connector industry combined with a decrease in our communication market due to a customer's loss of market share. Organic revenue declined 12 percent compared to the prior-year first quarter.
- Adjusted operating income for the first quarter of 2012 was $2 million, a 79 percent decrease compared with the 2011 first quarter, reflecting lower volumes and negative mix shift.
Control Technologies
Control Technologies designs and manufactures products including fuel management, actuation, and noise and energy absorption components for the aerospace and industrial markets.
- In Control Technologies, first-quarter total and organic revenue increased 1 percent to $79 million compared to the prior year as growth in the aerospace and industrial segments was offset by expected declines in defense and a lack of revenue from a prior-year rail seat project.
- 2012 first-quarter adjusted operating income was $13 million, a decrease of 10 percent, as incremental growth investments and negative mix shift offset higher volume, pricing and net operational productivity.
Guidance
The company maintains its guidance for full-year 2012 of adjusted earnings in the range of $1.62 to $1.72 per share. Total revenue is expected to grow 5 to 7 percent including expected market share gains as well as the impact of late-cycle strength in oil and gas and mining. The company also expects emerging markets growth will be approximately 10 percent driven by oil and gas in the Middle East and mining in Latin America, automotive gains in China and new global platforms and products.
Historical Quarterly Financial Data
ITT's selected historical quarterly financial data for fiscal years 2010 and 2011 is available on the company website at the following address: www.itt.com/investors.
Investor Call Today
ITT's senior management will host a conference call for investors today at 9 a.m. EDT to review first-quarter performance and answer questions. The briefing can be monitored live via webcast at the following address on the company's website: www.itt.com.