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ITT Brands Tie Up to Better Serve Mexico Energy Market

Two major brands of ITT CorporationITT , namely, C'treat and Bombas Goulds de Mexico ("BGM"), have formed a coalition to offer better water-supply solutions to Mexico's offshore energy industry. In particular, this alliance will help improve the delivery of seawater, portable water and pure water for the industries.

While C'treat enjoys a leadership position in the seawater desalination market, Goulds Pumps is well renowned in the global pumps market. As per terms of the alliance, C'treat has appointed BGM as the authorized sales representative for its entire range of offerings in the Mexican offshore market. This implies that BGM will enjoy special territory rights in the whole area.

Moreover, to provide further sales support and offshore-related services, BGM and C'treat will jointly open an office in Cuidad del Carmen, Campeche. For clients, this alliance means availability of a single large-scale contractor to meet all of their water-related needs at offshore platforms. This will facilitate timely completion of projects as well of reduction in penalty costs.

With a CAGR of 10.6%, the offshore drilling market will likely be worth $134.02 billion by 2019. Encouragingly, Gulf of Mexico is one of the naturally endowed oil-rich regions in world, witnessing huge investments on part of global companies that seek to strengthen their foothold in the offshore market.

We believe that in such a scenario, the coalition between C'treat and BGM will strengthen ITT's competitive position in the offshore global oil & gas markets. This is because their ability to create a singular platform for catering to all offshore platform needs will be particularly beneficial in gaining major clients. This, in turn, will be conducive to the company's overall profitability.

However, despite these positives, unfavorable fluctuations in oil price have weighed on ITT's revenues during second-quarter 2015. Moreover, strengthening of the U.S. dollar continues to hurt the company's top-line growth, adding to the woes.

ITT currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Energous Corporation WATT , Ideal Power, Inc. IPWR and Danaher Corp. DHR . All three stocks sport a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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