ITT Reports Solid 2009 Fourth-Quarter and Full-Year Results; Achieves Record Cash Flow; Raises 2010 Guidance

  • Fourth-quarter earnings from continuing operations up 10 percent to $1.06 per share, with revenue of $2.9 billion. Adjusted earnings from continuing operations up 18 percent to $0.97 per share.
  • Full-year 2009 earnings from continuing operations of $3.54 per share, with revenue of $10.9 billion. Adjusted earnings from continuing operations of $3.78 per share.
  • Record 2009 cash from operations of $1.3 billion and free cash flow of $1.1 billion, a 146 percent conversion of income from continuing operations adjusted for non-cash special items.
  • Adjusted earnings per share 2010 guidance raised to a range of $3.90 to $4.10.

WHITE PLAINS, N.Y. — (BUSINESS WIRE) — February 3, 2010 — ITT Corporation (NYSE: ITT) today reported 2009 fourth-quarter revenue of $2.9 billion and income from continuing operations of $196 million, or $1.06 per share. Excluding special items, income from continuing operations for the quarter was $178 million, or $0.97 per share, representing 18 percent year-over-year growth, as productivity benefits and lower restructuring costs more than offset lower volumes.

For the full year 2009, ITT reported revenues of $10.9 billion and income from continuing operations of $651 million, or $3.54 per share. Excluding special items, income was $696 million, or $3.78 per share. For the full year, free cash flow, representing cash from operations before a net discretionary pension contribution and less capital expenditures, was $1.1 billion, a 146 percent conversion of income from continuing operations adjusted for non-cash special items.

“The strength of our well-balanced portfolio enabled us to achieve EPS performance that was best in class for our multi-industry peer group. We are very proud of our teams around the globe for delivering on our commitments. We took important steps intended to position the company for the long term by increasing our strategic investments and accelerating our productivity initiatives while continuing to generate strong free cash flow to invest in our future,” said Steve Loranger, ITT’s chairman, president and chief executive officer.

The company also raised its full-year 2010 adjusted earnings per share guidance from its previously announced forecast of $3.85 to $4.05 to a new forecast of $3.90 to $4.10.

“We believe our innovative and essential products and services position us well to grow at or above the markets we serve. We saw this play out in 2009 with many key customer wins, and our outstanding achievements in operational excellence enable our confidence to raise our outlook for growth in 2010,” said Loranger. “For the long term, we believe we have the right strategies in place to grow organically while we invest for our future -- in categories that are adjacent to our core businesses and in emerging markets that will drive sustainable growth.”

2009 Fourth-Quarter and Full-Year Business Segment Results

ITT Defense & Information Solutions (formerly Defense Electronics & Services)

  • Fourth-quarter 2009 revenue for the Defense segment was $1.6 billion, down one percent compared to the year-ago period, as lower tactical radio volumes offset growth in service contracts and international Night Vision revenues. Fourth-quarter operating income for the segment grew to $207 million, up 10 percent on a comparable basis, driven by strong productivity actions.
  • Full-year 2009 revenue for the segment was flat compared with 2008 at $6.3 billion. For the full year, operating income for the segment was $776 million, a seven percent improvement year-over-year, driven by productivity actions.
  • At the close of 2009, the Defense segment had a funded backlog of $5.2 billion that was nearly flat to the prior year with little change in the mix of products and services.
  • During the first quarter of 2010, ITT announced a strategic realignment of its Defense segment to enable stronger portfolio positioning to accelerate new technology development in systems and solutions, achieve a more coordinated market approach, and reduce operational redundancies. The company’s Defense Electronics & Services segment was renamed ITT Defense & Information Solutions. Its previous organizational structure, comprising seven separate business units, will be consolidated into three stronger technology platforms in 2010: Electronic Systems, Geospatial Systems and Information Systems.

Fluid Technology

  • ITT’s Fluid Technology segment reported fourth-quarter 2009 revenue of $924 million, down six percent on a year-over-year basis, and a 13 percent decline in organic revenue (defined as total revenue excluding the impacts of foreign exchange and acquisition and divestiture activity), due primarily to global weakness in Residential and Commercial Water and lower revenues in North America from the Industrial Process business that offset continued strength in the municipal market. Fourth-quarter segment operating income was $104 million, up nine percent from the comparable prior-year period, driven by strong productivity, lower restructuring and realignment costs and favorable foreign exchange that more than offset lower volume.
  • For the full year, the segment revenue declined 12 percent to $3.4 billion, and organic revenue was down nine percent as stability in municipal markets was offset by declines in industrial, residential and commercial markets. The segment generated operating income of $393 million, down 16 percent on a comparable basis, as a result of lower volume and higher pension expense, partially offset by strong productivity and lower realignment costs.

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