) reported fairly good results for the fourth quarter and fiscal
2011. The company achieved top-line growth of 10% year over year in
the fourth quarter 2011. The company's sales increased across all
of its four business segments.
Fourth Quarter Highlights
Total revenue in the quarter increased 10% to $518 million
compared to $470 million in the prior-year period.
For fiscal 2011, the company reported revenues of $2.1 billion
which was 11% above the prior year with an organic growth of 9%
compared to the prior year. The primary driver of revenue growth
was a robust 19% growth in emerging markets and strong growth in
core markets of the company such as oil and gas, transportation and
ITT Corporation released its fourth quarter and full year 2011
earnings results and reported quarterly earnings per share from
continuing operations of $0.36, which was a penny above the Zacks
For the full year the company reported earnings of $1.60
reflecting a 23% increase compared to the prior year period, driven
by strong revenue growth and operating performance.
Agreement of Analysts
Among the analysts covering the stock in the last 7 days, none
revised their estimates upward for the first quarter of 2012.
However, for the last 30 days 2 analysts lowered the estimates for
the current year. Similarly, for the first quarter of 2013, none
increased their estimates but one analyst lowered the estimate in
the past 7 days.
We believe analysts expect margins to be under pressure due to
high incremental costs involved after the transformation to be a
stand-alone company. Further, some of the company's long cycle
projects are also expected to be a drag on margins.
However, the company is positive about its performance in fiscal
2012 with an EPS growth of 13% after adjusting for the incremental
stand alone costs worth $20 million.
Magnitude of Estimate Revisions
During the last 7 days, for the first quarter of 2012, the
current estimate was stagnant at 31 cents a share. However, for the
current year 2012, the estimate was lowered 2 cents from $1.71 to
$1.69 a share.
Again for second quarter of 2012, in the last 7 days, the Zacks
Consensus estimate was lowered by a penny to 43 cents a share. For
fiscal 2013 as well, the Zacks Consensus Estimate decreased 1 cent
from $1.93 to $1.92.
The fourth quarter earnings surprise for ITT was a penny or
2.86%. The upcoming quarter as well as fiscal 2012 it is expected
to remain at break-even, while fiscal for 2013 is expected to
report a negative earnings surprise of (0.52)%.
The company continues to make investments in attractive growth
areas such as air traffic management, emerging market expansion,
product innovation, defense adjacency, diversity strategy and
We are particularly bullish about two segments: a) water
equipment (primarily pumps), which should benefit from the
replacement and upgrading of aging networks in developed markets
and the build out of infrastructure in the emerging markets, and b)
ITT's defense business, with the bulk of sales derived from
electronic and network-centric warfare.
ITT Corporation continues to expand its product portfolio and
geographical presence while making a number of strategic
acquisitions. The acquisition of Godwin Pumps broadened the
company's global position in water, wastewater and industrial
processes, and compliments ITT's existing Fluid Technology
The company is particularly focused on its presence in the
emerging markets. The acquisition of Canberra Pumps increased its
footprint in Latin America, enabling it to provide more products to
the growing oil and gas and mining markets there.
The company currently holds a Zacks Rank #3 which implies a
short term Hold rating on the stock.
About Zacks Earnings Scorecard
As a PhD from MIT, Len Zacks proved over 30 years ago that
earnings estimate revisions are the most powerful force impacting
stock prices. He turned this ground breaking discovery into two
of the most celebrating stock rating systems in use today. The
Zacks Rank for stock trading in a 1 to 3 month time horizon and
the Zacks Recommendation for long-term investing (6+ months).
These "Earnings Estimate Scorecard" articles help analyze the
important aspects of estimate revisions for each stock after
their quarterly earnings announcements. Learn more about earnings
estimates and our proven stock ratings at
ITT CORP (
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