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ITT Tops Q2 Earnings & Revenue Estimates, Revises '18 View

ITT Inc.ITT reported better-than-expected results in second-quarter 2018.

Earnings/Revenues

Quarterly adjusted earnings came in at 82 cents per share, up 26.2% year over year. The bottom line also surpassed the Zacks Consensus Estimate of 78 cents.

Revenues in the reported quarter were $696.8 million, up 10.4% year over year. The top line also outpaced the Zacks Consensus Estimate of $682 million.

Segmental Break-Up

Revenues in the Industrial Process segment came in at $203.2 million, up 5.7% year over year. Top-line results in the Motion Technologies segment improved 13.9% year over year to $330.3 million. The Connect & Control Technologies segment's Q2 revenues came in at $164.1 million, up 9.7% year over year.

ITT Inc. Price, Consensus and EPS Surprise

ITT Inc. Price, Consensus and EPS Surprise | ITT Inc. Quote

Costs/Margins

Cost of sales in the reported quarter came in at $470.8 million, higher than $425.9 million recorded in the year-ago quarter. Gross profit margin was 32.4%, down 10 basis points (bps) year over year.

Sales and marketing expenses in the second quarter was $43.4 million, marginally rising 1% year over year. Operating margin in the quarter was 11.5%, up 210 bps year over year.

Balance Sheet/Cash Flow

Exiting the June-end quarter, this Zacks Rank #3 (Hold) company had cash and cash equivalents of $449.6 million, higher than $389.8 million recorded as of Dec 31, 2017. Aggregate non-current liabilities were $1,177.8 million, lower than $1,203 million recorded in 2017-end.

In first-half 2018, the company generated $119.3 million cash from operating activities, up from $92.6 million posted in the comparable period last year. Capital expenditures were $46.3 million, down from $53.3 million recorded in the year-ago tally.

Outlook

ITT is poised to boost its near-term competency on the back of stronger end-market demand and greater operational excellence. The company revised its earnings view for 2018 from $2.95-$3.15 per share to $3.05-$3.15 per share. Organic revenue growth is predicted to lie in the band of 3-5%.

Stocks to Consider

Some better-ranked stocks in the Zacks Conglomerates sector are listed below:

Crane Company CR carries a Zacks Rank #2 (Buy). The company pulled off an average positive earnings surprise of 3.03% over the last four quarters. You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here .

Carlisle Companies Incorporated CSL also has a Zacks Rank of 2. The company generated an average positive earnings surprise of 12.85% in the trailing four quarters.

Macquarie Infrastructure Company MIC is another Zacks #2 Ranked company. The stock came up with an average positive earnings surprise of 8.05% over the preceding four quarters.

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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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