ITT Inc.’s (ITT - Free Report) first-quarter 2024 adjusted earnings of $1.42 per share surpassed the Zacks Consensus Estimate of $1.36. The bottom line jumped 21% year over year, aided by an increase in sales across each of its segments.
Total revenues of $910.6 million beat the consensus estimate of $874 million. The top line increased 14.1% year over year, buoyed by pump projects in the Industrial Process, higher friction original equipment volume in the Motion Technologies and demand strength across the Connect & Control Technologies segments. The acquisitions of Svanehøj and Micro-Mode contributed 5% to the top line.
Organic sales rose 9% year over year. Foreign currency translation had a 1% unfavorable impact on sales.
Segmental Results
Revenues from the Industrial Process segment totaled $333.9 million, up 25.3% year over year. Growth in pump projects and the buyout of Svanehøj drove the segment’s performance. Organic sales increased 12.5% and adjusted operating income grew 19.9% on a year-over-year basis.
Revenues from the Motion Technologies segment amounted to $392.4 million, implying a year-over-year increase of 7.6%. Our estimate for the same was pinned at $382 million.
Higher sales volume in friction original equipment and rail demand in KONI business aided segmental performance. Organic revenues grew 8.2%. Adjusted operating income increased 32%.
Revenues from the Connect & Control Technologies segment of $185.1 million rose 10.4% year over year on a reported basis and 7.2% organically. Our estimate was $183 million. Favorable pricing actions, volume growth in aerospace and defense components and the acquisition of Micro-Mode aided the segment’s performance. Adjusted operating income increased 14.7% year over year.
Margin Profile
During the quarter under review, ITT’s cost of revenues increased 13.8% year over year to $609.8 million. The gross profit jumped 14.8% to $300.8 million.
General and administrative expenses grew 4.7% year over year to $71.5 million. Sales and marketing expenses rose 16.8% year over year to $50.1 million. Research and development expenses increased 12.1% year over year to $30.0 million.
Adjusted operating income climbed 22.8% year over year to $155 million. The margin extended 120 basis points to 17%.
Balance Sheet and Cash Flow
Exiting the first quarter of 2024, ITT had cash and cash equivalents of $423 million compared with $489.2 million at the end of fourth-quarter 2023. The company’s short-term borrowings were $322.7 million compared with $187.7 million at the end of December 2023.
In the first three months of 2024, ITT generated net cash of $57.8 million from operating activities compared with $58.1 million in the year-ago quarter. Capital expenditure totaled $27.7 million in the same period, down 3.5% year over year. Free cash flow was $30.1 million in the first three months of 2024 compared with $29.4 million in the prior-year quarter.
During the first three months of 2024, ITT paid out dividends of $26.5 million, up 9.5% year over year. It did not repurchase any shares in the period compared with share repurchase of $30 million in the year-ago period.
2024 Outlook
ITT expects adjusted earnings in the range of $5.65-$5.90 per share compared with $5.45-$5.90 predicted previously. The guided range suggests an increase of 8.5-13.2% from the prior-year actuals.
Management projects revenue growth in the band of 9-12% (4-7% organically). Adjusted segment operating margin is estimated to be between 17.1% and 17.7%, higher than 16.9-17.5% estimated earlier. Free cash flow is forecast in the range of $435-$475 million. This indicates a free cash flow margin of 12-13%.
Zacks Rank & Key Picks
ITT currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks are discussed below.
Carlisle Companies Incorporated (CSL - Free Report) presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 17%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CSL’s 2024 earnings has increased 5.8% in the past 60 days.
Ingersoll Rand plc (IR - Free Report) currently carries a Zacks Rank of 2 (Buy). IR delivered a trailing four-quarter average earnings surprise of 15.9%.
In the past 60 days, the Zacks Consensus Estimate for Ingersoll Rand’s 2024 earnings has inched up 0.3%.
Griffon Corporation (GFF - Free Report) presently flaunts a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 42%.
In the past 60 days, the Zacks Consensus Estimate for GFF’s 2024 earnings has decreased 1.3%.
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ITT Inc.’s (ITT - Free Report) first-quarter 2024 adjusted earnings of $1.42 per share surpassed the Zacks Consensus Estimate of $1.36. The bottom line jumped 21% year over year, aided by an increase in sales across each of its segments.
Total revenues of $910.6 million beat the consensus estimate of $874 million. The top line increased 14.1% year over year, buoyed by pump projects in the Industrial Process, higher friction original equipment volume in the Motion Technologies and demand strength across the Connect & Control Technologies segments. The acquisitions of Svanehøj and Micro-Mode contributed 5% to the top line.
Organic sales rose 9% year over year. Foreign currency translation had a 1% unfavorable impact on sales.
Segmental Results
Revenues from the Industrial Process segment totaled $333.9 million, up 25.3% year over year. Growth in pump projects and the buyout of Svanehøj drove the segment’s performance. Organic sales increased 12.5% and adjusted operating income grew 19.9% on a year-over-year basis.
Revenues from the Motion Technologies segment amounted to $392.4 million, implying a year-over-year increase of 7.6%. Our estimate for the same was pinned at $382 million.
Higher sales volume in friction original equipment and rail demand in KONI business aided segmental performance. Organic revenues grew 8.2%. Adjusted operating income increased 32%.
Revenues from the Connect & Control Technologies segment of $185.1 million rose 10.4% year over year on a reported basis and 7.2% organically. Our estimate was $183 million. Favorable pricing actions, volume growth in aerospace and defense components and the acquisition of Micro-Mode aided the segment’s performance. Adjusted operating income increased 14.7% year over year.
Margin Profile
During the quarter under review, ITT’s cost of revenues increased 13.8% year over year to $609.8 million. The gross profit jumped 14.8% to $300.8 million.
General and administrative expenses grew 4.7% year over year to $71.5 million. Sales and marketing expenses rose 16.8% year over year to $50.1 million. Research and development expenses increased 12.1% year over year to $30.0 million.
Adjusted operating income climbed 22.8% year over year to $155 million. The margin extended 120 basis points to 17%.
Balance Sheet and Cash Flow
Exiting the first quarter of 2024, ITT had cash and cash equivalents of $423 million compared with $489.2 million at the end of fourth-quarter 2023. The company’s short-term borrowings were $322.7 million compared with $187.7 million at the end of December 2023.
In the first three months of 2024, ITT generated net cash of $57.8 million from operating activities compared with $58.1 million in the year-ago quarter. Capital expenditure totaled $27.7 million in the same period, down 3.5% year over year. Free cash flow was $30.1 million in the first three months of 2024 compared with $29.4 million in the prior-year quarter.
During the first three months of 2024, ITT paid out dividends of $26.5 million, up 9.5% year over year. It did not repurchase any shares in the period compared with share repurchase of $30 million in the year-ago period.
2024 Outlook
ITT expects adjusted earnings in the range of $5.65-$5.90 per share compared with $5.45-$5.90 predicted previously. The guided range suggests an increase of 8.5-13.2% from the prior-year actuals.
Management projects revenue growth in the band of 9-12% (4-7% organically). Adjusted segment operating margin is estimated to be between 17.1% and 17.7%, higher than 16.9-17.5% estimated earlier. Free cash flow is forecast in the range of $435-$475 million. This indicates a free cash flow margin of 12-13%.
Zacks Rank & Key Picks
ITT currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks are discussed below.
Carlisle Companies Incorporated (CSL - Free Report) presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 17%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CSL’s 2024 earnings has increased 5.8% in the past 60 days.
Ingersoll Rand plc (IR - Free Report) currently carries a Zacks Rank of 2 (Buy). IR delivered a trailing four-quarter average earnings surprise of 15.9%.
In the past 60 days, the Zacks Consensus Estimate for Ingersoll Rand’s 2024 earnings has inched up 0.3%.
Griffon Corporation (GFF - Free Report) presently flaunts a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 42%.
In the past 60 days, the Zacks Consensus Estimate for GFF’s 2024 earnings has decreased 1.3%.
Highest Returns for Any Asset Class
It’s not even close. Despite ups and downs, Bitcoin has been more profitable for investors than any other decentralized, borderless form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%. Zacks predicts another significant surge in months to come.
Hurry, Download Special Report – It’s FREE >>
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