ITT's 3Q Profit Down 73% On $131 Million Asbestos Charge
By Bob Tita, Of DOW JONES NEWSWIRES
CHICAGO -(Dow Jones)- ITT Corp. (ITT) reported a 73% drop in third-quarter
profit, stemming from a $131 million charge for asbestos liability claims.
The defense and industrial conglomerate said Friday net income fell to $59
million, or 32 cents per share, compared with $216.3 million, or $1.17 per
share, during the same period a year earlier. Excluding the 71-cent-per-share
asbestos charge, income from continuing operations totaled $190 million, or $
1.03 per share.
Revenue in the quarter slipped 6% to $2.7 billion.
Wall Street analysts polled by Thomson Reuters expected the company to earn 90
cents a share, excluding charges, on revenue of $2.7 billion.
The White Plains, N.Y., company raised its 2009 profit outlook to $3.70 to $
3.74 a share from $3.50 to $3.70 a share previously. ITT's revenue forecast for
the year is unchanged at $10.9 billion to $11 billion.
"We believe the company is doing what is required to emerge from the current
economic environment as a much stronger company," Chairman and Chief Executive
Steve Loranger said in written statement.
ITT's exposure to asbestos liability is primarily from pumps sold before 1985
that had gaskets and packing that allegedly contained asbestos. The gaskets and
packing were manufactured by other companies. Asbestos, which was once widely
used for fire proofing, is a suspected carcinogen in humans. The $131 million
set aside for claims is the projected amount needed for the next 10 years, ITT
said. The company also expects to use insurance to offset its costs for asbestos
claims.
The third-quarter performance of the ITT's business segments continued the
pattern seen in recent quarters with the best growth in revenue and income
coming from ITT's defense electronics services business.
Defense unit revenue grew 2% from a year earlier to $1.57 billion. Operating
income rose 8% to $203.3 million. ITT continues to see robust demand for its
signal-jamming technologies to counter improvised explosives targeted at U.S.
troops in Afghanistan and Iraq.
Revenue from ITT's fluid technology unit, which makes pumps for water and
sewage treatment plants, fell 13% in the quarter. ITT's motion and flow control
unit, which supplies equipment and components to the automotive, aerospace and
rail industries, reported a 22% decline in revenue.
ITT's stock Thursday closed up 1.9%, or $1.02, at $54.36 a share.
-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com
(END) Dow Jones Newswires
10-30-090715ET
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