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ITT Q3 Earnings and Revenues Beat Estimates, Decline Y/Y
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ITT Inc. (ITT - Free Report) reported better-than-expected results in third-quarter 2020, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
In the quarter, the company pulled off a positive earnings surprise of 15.5%. Quarterly adjusted earnings were 82 cents per share, outpacing the Zacks Consensus Estimate of 71 cents. However, the bottom line declined 15.5% from the year-ago figure.
Revenues of $591.2 million were down 17% year over year. Also, revenues fell 18% on an organic basis. However, the top line surpassed the consensus mark of $589 million by 0.4%.
Segmental Breakup
Third-quarter revenues of Industrial Process were $194.1 million, down 19% year over year. Organic sales declined 19%, owing to lower revenues from chemical and oil and gas pump projects and weakness across the short-cycle business.
Quarterly revenues of Motion Technologies declined 11% year over year to $271.8 million.
Organic sales decreased 13%, mainly due to lower Friction sales in Europe on account of soft demand.
Connect & Control Technologies generated $125.9 million revenues, down 25% year over year. Organic sales fell 26%, owing to weakness across aerospace and defense end markets amid the coronavirus outbreak.
Cost of sales in the third quarter was $400.6 million, down 16.6% year over year. Sales and marketing expenses were $33.4 million compared with $41.6 million in the year-ago quarter.
Gross profit decreased 17.6% on a year-over-year basis to $190.6 million. Gross profit margin was 32.2%, down 30 basis points.
Balance Sheet/Cash Flow
Exiting the third quarter, ITT had cash and cash equivalents of $782.3 million, up from $612.1 million as of Dec 31, 2019. Commercial paper and current maturities of long-term debt were $118.7 million compared with $86.5 million at the end of 2019.
In the first nine months of 2020, the company generated $318.1 million in cash from operating activities, higher than $221.7 million recorded in the year-ago period. Capital expenditure totaled $47.6 million, declining from $69.3 million spent in the year-ago period.
Guidance
On uncertainties regarding the impacts of the coronavirus outbreak on financial and operating results, ITT has not provided its earnings and revenues guidance for 2020.
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
Crane delivered trailing-four quarter positive earnings surprise of 14.59%, on average.
Danaher delivered a positive earnings surprise of 17%, on average, in the trailing four quarters.
Federal Signal delivered a positive earnings surprise of 16.78%, on average, in the trailing four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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ITT Q3 Earnings and Revenues Beat Estimates, Decline Y/Y
ITT Inc. (ITT - Free Report) reported better-than-expected results in third-quarter 2020, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
In the quarter, the company pulled off a positive earnings surprise of 15.5%. Quarterly adjusted earnings were 82 cents per share, outpacing the Zacks Consensus Estimate of 71 cents. However, the bottom line declined 15.5% from the year-ago figure.
Revenues of $591.2 million were down 17% year over year. Also, revenues fell 18% on an organic basis. However, the top line surpassed the consensus mark of $589 million by 0.4%.
Segmental Breakup
Third-quarter revenues of Industrial Process were $194.1 million, down 19% year over year. Organic sales declined 19%, owing to lower revenues from chemical and oil and gas pump projects and weakness across the short-cycle business.
Quarterly revenues of Motion Technologies declined 11% year over year to $271.8 million.
Organic sales decreased 13%, mainly due to lower Friction sales in Europe on account of soft demand.
Connect & Control Technologies generated $125.9 million revenues, down 25% year over year. Organic sales fell 26%, owing to weakness across aerospace and defense end markets amid the coronavirus outbreak.
ITT Inc. Price, Consensus and EPS Surprise
ITT Inc. price-consensus-eps-surprise-chart | ITT Inc. Quote
Costs/Margins
Cost of sales in the third quarter was $400.6 million, down 16.6% year over year. Sales and marketing expenses were $33.4 million compared with $41.6 million in the year-ago quarter.
Gross profit decreased 17.6% on a year-over-year basis to $190.6 million. Gross profit margin was 32.2%, down 30 basis points.
Balance Sheet/Cash Flow
Exiting the third quarter, ITT had cash and cash equivalents of $782.3 million, up from $612.1 million as of Dec 31, 2019. Commercial paper and current maturities of long-term debt were $118.7 million compared with $86.5 million at the end of 2019.
In the first nine months of 2020, the company generated $318.1 million in cash from operating activities, higher than $221.7 million recorded in the year-ago period. Capital expenditure totaled $47.6 million, declining from $69.3 million spent in the year-ago period.
Guidance
On uncertainties regarding the impacts of the coronavirus outbreak on financial and operating results, ITT has not provided its earnings and revenues guidance for 2020.
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the same space are Crane Company (CR - Free Report) , Danaher Corporation (DHR - Free Report) and Federal Signal Corporation (FSS - Free Report) . All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Crane delivered trailing-four quarter positive earnings surprise of 14.59%, on average.
Danaher delivered a positive earnings surprise of 17%, on average, in the trailing four quarters.
Federal Signal delivered a positive earnings surprise of 16.78%, on average, in the trailing four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>