ITT Corporation
(
ITT
) reported first quarter 2012 earnings per share from continuing
operations of 39 cents, which was 21.8% above the Zacks Consensus
Estimate.
However, earnings were down 13.3% year over year from 45 cents.
The decline was primarily attributable to 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.
On a GAAP basis, the company reported earnings of 11 cents,
compared to a loss of 23 cents in the year ago quarter.
Total Revenue
Total revenue increased 8.3% to $577 million, compared to $533
million in the prior-year period. Organic revenue grew 9% for the
quarter. Revenue was above the Zacks Consensus Estimate of $557
million.
The top line was driven by a 22% growth in emerging markets and
11% growth in North America, as well as gains in core markets such
as oil and gas, mining, chemical and general industrial.
Segment Results
The
Industrial Process
segment reported revenue growth of 35% to $226 million, driven by
growth in project shipments across all regions and markets,
particularly in Latin America where revenue increased 71%.
Quarterly revenue also included a $7 million benefit from
Industrial Process' Blakers Pump Engineers, which ITT acquired in
October 2011. Organic revenue was up 30% compared to the prior
year.
Revenue at
Motion Technologies
contracted 2% year over year to $180 million due to weakness in the
shock absorbers product lines. However, organic growth was up 2%
thanks to gains in Europe and growth in emerging markets and North
America. A strong performance from the automotive segment also
contributed.
Interconnect Solutions'
revenue for the year was $93 million, declining 1% from the prior
year, primarily due to general weakness in the global connector
industry combined with a decrease in the communication market
due to a customer's loss of market share. Organic revenue
contracted 12% year over year.
In
Control Technologies
, revenue increased 1% to $79 million compared to the prior year,
driven by growth in the aerospace and industrial segments which was
almost fully offset by expected declines in defense and a lack of
revenue from a prior-year rail seat project.
Income and Expenses
For the quarter, the company reported operating income of $37
million compared to a loss of $10 million in the prior-year
quarter. This was driven by increased volume and strong operating
productivity, partially offset by negative project mix shift and
post-spin incremental recurring costs.
Balance Sheet & Cash Flow
At the end of the quarter, cash and cash equivalents was $728
million with long-term debt of $4 million and shareowner's equity
of $723 million.
Outlook
Concurrent with the full year earnings release, the company
reiterated guidance for fiscal 2012. The company expects earnings
in the range of $1.62 to $1.72 per share. Total revenue is expected
to grow 5% to 7%, including expected market share gains as well as
the impact of late-cycle strength in oil & gas and mining. The
company also expects emerging markets to grow approximately 10% due
to oil and gas in the Middle East and in South America, automotive
gains in China and new global platforms and products.
The company currently holds a Zacks Rank # 3 which implies a
short-term (1-3 months) 'Hold' rating on the stock.
ITT CORP (ITT): Free Stock Analysis Report
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