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ITT Q2 Earnings & Revenues Surpass Estimates, Increase Y/Y

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ITT Inc. (ITT - Free Report) reported better-than-expected second-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate.

Quarterly adjusted earnings were 94 cents per share, outpacing the Zacks Consensus Estimate of 90 cents, delivering a surprise of 4.4%. Also, the bottom line increased 64.9% from the year-ago quarter.

Revenues of $691.6 million were up 34.4% year over year and jumped 29.5% on an organic basis. The top line surpassed the consensus mark of $644 million by 7.3%.

Segmental Breakup

Second-quarter revenues of Industrial Process were $213.9 million, up 10.7% year over year. Organic sales increased 7.7%, owing to higher pump projects within the oil and gas, chemical and general industrial markets.

Quarterly revenues of Motion Technologies rose 72.4% year over year to $343.6 million. Organic sales increased 63.6%, primarily driven by strength in the global automotive markets and higher Friction sales on account of improved demand.

Connect & Control Technologies generated $134.5 million revenues, up 9.4% year over year. Organic sales grew 8% owing to strength in industrial market partially offset by softness in global commercial aerospace market.

Costs/Margins

Cost of sales in the second quarter was $467 million, up 33% year over year. Sales and marketing expenses were $38.3 million compared with $35.7 million in the year-ago quarter.

Gross profit rose 37.3% on a year-over-year basis to $224.6 million. Gross profit margin was 32.5%, up 70 basis points.

Balance Sheet/Cash Flow

Exiting the second quarter, ITT had cash and cash equivalents of $578.8 million, down from $859.8 million as of Dec 31, 2020. Commercial paper and current maturities of long-term debt were $199.7 million compared with $106.8 million at the end of 2020.

In the first six months of 2021, the company used $231.6 million of net cash from operating activities against $203.1 million generated in the prior-year period. Capital expenditures totaled $35.1 million, increasing from $34.3 million spent a year ago.

In the first six months of 2021, the company repurchased shares worth $61.4 million compared with $83.7 million in the year-ago period. It paid dividends worth $38.1 million compared with $14.6 million a year ago.

Guidance

For 2021, the company anticipates adjusted earnings of $3.90-$4.05 per share compared with $3.80-$4.00 per share predicted earlier.

For the year, the company expects revenues to increase in the range of 11-13%, with organic growth of 8-10%.

ITT Inc. Price, Consensus and EPS Surprise

ITT Inc. Price, Consensus and EPS Surprise

ITT Inc. price-consensus-eps-surprise-chart | ITT Inc. Quote

Zacks Rank & Other Stocks to Consider

The company currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks are AZZ Inc. (AZZ - Free Report) , Brady Corporation (BRC - Free Report) and Eaton Corporation plc (ETN - Free Report) . While AZZ sports a Zacks Rank #1 (Strong Buy), Brady and Eaton carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AZZ delivered an earnings surprise of 21.24%, on average, in the trailing four quarters.

Brady delivered an earnings surprise of 1.58%, on average, in the trailing four quarters.

Eaton delivered an earnings surprise of 10.87%, on average, in the trailing four quarters.


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