ITT Announces Strong 2011 Results, Solid 2012 Guidance
- 2011 revenue up 11 percent to $2.1 billion with strong growth in emerging markets
- Impacts associated with spin-offs of defense and water businesses drove 2011 loss from continuing operations of ($6.23) per share
- 2011 adjusted pro forma earnings per share from continuing operations was $1.60 per share, a 23 percent increase over 2010, reflecting solid segment operating margin expansion
- 2012 adjusted earnings per share guidance is $1.62 to $1.72 per share
WHITE PLAINS, N.Y., February 29, 2012 – ITT Corporation (NYSE: ITT) today reported its 2011 financial performance, including solid gains in revenue and segment operating margin expansion achieved during a year when the company executed a successful separation plan that transformed ITT into a diversified global industrial company.
As previously announced, the company had annual revenue of $2.1 billion, reflecting overall growth of 11 percent and organic growth of 9 percent compared with the prior year. Revenue results included 19 percent growth in emerging markets as well as solid gains in core markets such as oil and gas, transportation and aerospace.
Adjusted pro forma income from continuing operations, which excludes special items and includes pro forma adjustments, was $150 million, or $1.60 per share, a 23 percent increase over 2010, reflecting strong revenue growth and operating performance. Special items primarily include costs incurred to complete the separation plan, including debt extinguishment, as well as tax items and asbestos-related costs. Pro forma adjustments relate to the net interest expense due to the extinguishment of debt in connection with the separation plan.
"As a more focused industrial ITT, we are now well-positioned for profitable growth. We are delivering strong operating performance and are already making progress against our key growth drivers," said CEO and President Denise Ramos.
"Our successes include achieving double-digit growth in emerging markets and enhancing our global footprint in China and Brazil, completing the acquisition of Blakers Pump Engineers in Australia, and continuing to strengthen our relationships with our customers. We believe this gives us a very strong foundation from which to continue creating value for customers, employees and shareowners in 2012."
Fourth-quarter organic revenue increased 10 percent to $518 million compared with the fourth quarter of 2010. Impacts associated with the spin-offs of ITT’s defense and water businesses were reflected in fourth-quarter results as the company reported a loss from continuing operations of ($5.86) per share. Adjusted pro forma income from continuing operations was $34 million, or $0.36 per share, reflecting year-over-year growth of 20 percent.
2011 Full-Year Business Segment Results
Industrial Process designs and manufactures industrial pumps and valves for the oil and gas, chemical, mining and industrial markets.
- Full-year 2011 total revenue was $767 million, up 11 percent compared with 2010, as a result of solid gains in the North American chemical, oil and gas, and power markets and the South American, Eastern European and Middle Eastern oil and gas markets.
- For the full year, adjusted operating income for the segment was $94 million, an 18 percent year-over-year increase, driven by increased sales volume and net cost reductions from productivity and sourcing initiatives.
Motion Technologies designs and manufactures braking technologies and shock absorbers for the automotive and rail markets.
- In Motion Technologies, full-year 2011 revenue increased 16 percent to $634 million due to gains in the European original equipment manufacturer automotive, North American automotive, and European and Chinese rail markets.
- For the full year, adjusted operating income for the business was $86 million, a 2 percent increase compared with 2010, reflecting increased sales volume offset by mix and increased material costs.
Interconnect Solutions designs and manufactures connectors and interconnects for the aerospace, industrial and transportation markets.
- Full-year 2011 revenue for Interconnect Solutions was $418 million, a 1 percent increase compared with full-year 2010, as first-half strength in the aerospace, transportation, oil and gas, and defense markets was primarily offset by a general market decline in the second half.
- Adjusted operating income for the full year was $41 million, up 9 percent compared with 2010, as cost reduction actions, operating productivity and lower warranty and compensation-related costs offset increased materials cost and negative mix shift.
Control Technologies designs and manufactures products including fuel management, actuation, and noise and energy absorption components for the aerospace and industrial markets.
- In Control Technologies, full-year 2011 revenue increased 16 percent to $318 million due to growth in commercial aerospace, European industrial and Chinese rail markets.
- 2011 full-year adjusted operating income was $58 million, an increase of 83 percent, driven by favorable volume and mix, operating adjustments and improved effectiveness in our industrial businesses.
The company announced guidance for full-year 2012 of adjusted earnings in the range of $1.62 to $1.72 per share. Total revenue is expected to grow 5 to 7 percent including expected market share gains as well as the impact of late-cycle strength in oil and gas and mining. The company also expects emerging markets growth will be approximately 10 percent driven by oil and gas in the Middle East and in South America, automotive gains in China and new global platforms and products. As a result, ITT expects solid adjusted segment operating margin growth of 40 basis points as productivity offsets additional costs related to the spin and drives incremental investments.
Investor Call Today
ITT's senior management will host a conference call for investors today at 9 a.m. Eastern Standard Time to review full-year performance and answer questions. The briefing can be monitored live via webcast at the following address on the company's Web site: www.itt.com/investors.
ITT is a diversified leading manufacturer of highly engineered critical components and customized technology solutions for growing industrial end-markets in energy infrastructure, electronics, aerospace and transportation. Building on its heritage of innovation, ITT partners with its customers to deliver enduring solutions to the key industries that underpin our modern way of life. Founded in 1920, ITT is headquartered in White Plains, N.Y., with employees in more than 30 countries and sales in a total of approximately 125 countries. The company generated 2011 revenues of $2.1 billion. For more information, visit www.itt.com.
Safe Harbor Statement
Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, future strategic plans and other statements that describe the company’s business strategy, outlook, objectives, plans, intentions or goals, and any discussion of future operating or financial performance. Whenever used, words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target" and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements are uncertain and to some extent unpredictable, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such forward-looking statements. Factors that could cause results to differ materially from those anticipated include, but are not limited to: Uncertainties with respect to our estimation of asbestos liability exposures, third-party recoveries and net cash flow; economic, political and social conditions in the countries in which we conduct our businesses; changes in U.S. or International sales and operations; contingencies related to actual or alleged environmental contamination, claims and concerns; decline in consumer spending; sales and revenues mix and pricing levels; availability of adequate labor, commodities, supplies and raw materials; interest and foreign currency exchange rate fluctuations and changes in local government regulations; competition, industry capacity and production rates; ability of third parties, including our commercial partners, counterparties, financial institutions and insurers, to comply with their commitments to us; our ability to borrow and availability of liquidity sufficient to meet our needs; changes in the value of goodwill or intangible assets; our ability to achieve stated synergies or cost savings from acquisitions or divestitures; the number of personal injury claims filed against the companies or the degree of liability; our ability to effect restructuring and cost reduction programs and realize savings from such actions; changes in our effective tax rate as a result in changes in the geographic earnings mix, tax examinations or disputes, tax authority rulings or changes in applicable tax laws; government regulations and compliance therewith, including Dodd-Frank legislation involving such issues as conflict minerals; changes in technology; intellectual property matters; governmental investigations; potential future employee benefit plan contributions and other employment and pension matters; susceptibility to market fluctuations and costs as a result of becoming a smaller, more focused company after the spin-off; changes in generally accepted accounting principles; and other factors set forth in our Annual Report on Form 10−K for the fiscal year ended December 31, 2010 and our other filings with the Securities and Exchange Commission.
The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
tel +1 914 641 2103
tel +1 914 641 2032