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ITT Q1 Earnings Meet Estimates, Revenues Top, Orders Rise Y/Y
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ITT Inc.’s (ITT - Free Report) first-quarter 2022 earnings came in line with the Zacks Consensus Estimate of 97 cents while sales beat the same by 4.1%.
ITT’s adjusted earnings in the reported quarter were 97 cents per share, matching the consensus mark. The bottom line declined 8. 5% from the year-ago figure of $1.06. Inflation in raw material and overhead costs had adverse impacts.
Image Source: Zacks Investment Research
ITT’s shares have lost 17.9% compared with the industry’s decline of 9.3%.
Revenue Details
In the quarter under review, ITT’s net sales were $726.2 million, reflecting a year-over-year increase of 4%. The upside was primarily attributable to a 6.8% increase in organic sales. In the reported quarter, total orders were $812.1 million, increasing 11% year over year. The metric increased 14% on an organic basis.
ITT’s revenues beat the Zacks Consensus Estimate of $698 million.
ITT currently reports under three business segments: Industrial Process, Motion Technologies, and Connect and Control Technologies.
The segmental information is briefly discussed below:
Revenues from Industrial Process totaled $202.2 million, almost flat with $202.3 million reported in the previous year’s quarter. This was primarily attributable to a 2% increase in organic sales. Supply-chain challenges adversely impacted ITT’s energy and chemical business in the quarter. Orders increased 23% year over year on an organic basis.
Revenues from Motion Technologies totaled $370.1 million, reflecting year-over-year growth of 0.3%. The results grew from a 4% increase in organic sales. Supply-chain constraints affected the operations of the automotive OEM businesses. Orders grew 3% from the year-ago quarter’s level on an organic basis.
Revenues from Connect and Control Technologies totaled $154.6 million, up 21.4% year over year and up 23%, organically. Results benefited from strength in the industrial, defence and commercial aerospace end markets. Orders expanded 28% year over year on an organic basis.
In the quarter, ITT’s cost of revenues increased 8.2% year over year to $507.8 million. The same represented 70% of the quarter’s sales compared with 67.2% in the year-ago quarter. Gross profit decreased 4.6% to $218.4 million, and as a percentage of sales, it was 30.1%.
General and administrative expenses increased 4% year over year to $60.4 million while sales and marketing expenses rose 4.6% to $38.4 million. Research and development expenses inched up 2.9% to $25 million.
Adjusted segmental operating income in the quarter decreased 5% year over year to $116 million. Margin decreased 150 basis points (bps) to 16%. Supply-chain woes, inflation in raw material costs and expenses were a spoilsport. However, results benefited from higher sales volume and pricing actions.
Balance Sheet and Cash Flow
Exiting first-quarter 2022, ITT had cash and cash equivalents of $710.4 million, up 9.7% from $647.5 million in the previous quarter. Its commercial paper and current maturities of long-term debt were $487.0 million, while total non-current assets were $1,821.1 million.
In the first three months of 2022, ITT used $2.7 million for its operating activities compared to net cash generation of $70.8 million in the previous year’s quarter. Capital expenditure was $30 million, up from $17.2 million in the previous year’s quarter. Free cash outflow was $32.7 million against an inflow of $53.6 million a year ago.
In the first three months, ITT paid out dividends of $22.4 million, up from $19.1 million in the previous year’s quarter. Share repurchases were $163.9 million, up from shares worth $50 million bought back in the first three months of 2021.
Outlook
For 2022, ITT anticipates adjusted earnings of $4.30-$4.70 per share. The projection suggests growth of 6-16% from the year-ago reported figure.
Revenues are expected to increase 7-9% year over year and 9-11% organically. Adjusted segmental operating margin is predicted to increase 40-130 bps year over year to 17.6-18.5%. Free cash flow is expected to be $250-$300 million.
Zacks Rank & Stocks to Consider
With a market capitalization of $6.4 billion, ITT currently carries a Zacks Rank #4 (Sell).
In the past 60 days, earnings estimates for GFF have increased 40% for fiscal 2022 (ending September 2022). The stock has declined 13.2% in the past three months.
Carlisle Companies Incorporated (CSL - Free Report) presently carries a Zacks Rank of 1. CSL delivered a trailing four-quarter earnings surprise of 23%, on average.
Earnings estimates for CSL have increased 10.8% for 2022 in the past 60 days. Its shares have rallied 25.3% in the past three months.
Ferguson plc (FERG - Free Report) is presently Zacks #2 Ranked. FERG’s earnings surprise in the last four quarters was 14.2%, on average.
In the past 60 days, the stock’s earnings estimates have increased 6.5% for fiscal 2022 (ending July 2022). The same has declined 16.3% in the past three months.
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ITT Q1 Earnings Meet Estimates, Revenues Top, Orders Rise Y/Y
ITT Inc.’s (ITT - Free Report) first-quarter 2022 earnings came in line with the Zacks Consensus Estimate of 97 cents while sales beat the same by 4.1%.
ITT’s adjusted earnings in the reported quarter were 97 cents per share, matching the consensus mark. The bottom line declined 8. 5% from the year-ago figure of $1.06. Inflation in raw material and overhead costs had adverse impacts.
Image Source: Zacks Investment Research
ITT’s shares have lost 17.9% compared with the industry’s decline of 9.3%.
Revenue Details
In the quarter under review, ITT’s net sales were $726.2 million, reflecting a year-over-year increase of 4%. The upside was primarily attributable to a 6.8% increase in organic sales. In the reported quarter, total orders were $812.1 million, increasing 11% year over year. The metric increased 14% on an organic basis.
ITT’s revenues beat the Zacks Consensus Estimate of $698 million.
ITT currently reports under three business segments: Industrial Process, Motion Technologies, and Connect and Control Technologies.
The segmental information is briefly discussed below:
Revenues from Industrial Process totaled $202.2 million, almost flat with $202.3 million reported in the previous year’s quarter. This was primarily attributable to a 2% increase in organic sales. Supply-chain challenges adversely impacted ITT’s energy and chemical business in the quarter. Orders increased 23% year over year on an organic basis.
Revenues from Motion Technologies totaled $370.1 million, reflecting year-over-year growth of 0.3%. The results grew from a 4% increase in organic sales. Supply-chain constraints affected the operations of the automotive OEM businesses. Orders grew 3% from the year-ago quarter’s level on an organic basis.
Revenues from Connect and Control Technologies totaled $154.6 million, up 21.4% year over year and up 23%, organically. Results benefited from strength in the industrial, defence and commercial aerospace end markets. Orders expanded 28% year over year on an organic basis.
ITT Inc. Price, Consensus and EPS Surprise
ITT Inc. price-consensus-eps-surprise-chart | ITT Inc. Quote
Margin Profile
In the quarter, ITT’s cost of revenues increased 8.2% year over year to $507.8 million. The same represented 70% of the quarter’s sales compared with 67.2% in the year-ago quarter. Gross profit decreased 4.6% to $218.4 million, and as a percentage of sales, it was 30.1%.
General and administrative expenses increased 4% year over year to $60.4 million while sales and marketing expenses rose 4.6% to $38.4 million. Research and development expenses inched up 2.9% to $25 million.
Adjusted segmental operating income in the quarter decreased 5% year over year to $116 million. Margin decreased 150 basis points (bps) to 16%. Supply-chain woes, inflation in raw material costs and expenses were a spoilsport. However, results benefited from higher sales volume and pricing actions.
Balance Sheet and Cash Flow
Exiting first-quarter 2022, ITT had cash and cash equivalents of $710.4 million, up 9.7% from $647.5 million in the previous quarter. Its commercial paper and current maturities of long-term debt were $487.0 million, while total non-current assets were $1,821.1 million.
In the first three months of 2022, ITT used $2.7 million for its operating activities compared to net cash generation of $70.8 million in the previous year’s quarter. Capital expenditure was $30 million, up from $17.2 million in the previous year’s quarter. Free cash outflow was $32.7 million against an inflow of $53.6 million a year ago.
In the first three months, ITT paid out dividends of $22.4 million, up from $19.1 million in the previous year’s quarter. Share repurchases were $163.9 million, up from shares worth $50 million bought back in the first three months of 2021.
Outlook
For 2022, ITT anticipates adjusted earnings of $4.30-$4.70 per share. The projection suggests growth of 6-16% from the year-ago reported figure.
Revenues are expected to increase 7-9% year over year and 9-11% organically. Adjusted segmental operating margin is predicted to increase 40-130 bps year over year to 17.6-18.5%. Free cash flow is expected to be $250-$300 million.
Zacks Rank & Stocks to Consider
With a market capitalization of $6.4 billion, ITT currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks are discussed below:
Griffon Corporation (GFF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). GFF’s earnings surprise in the last four quarters was 97%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for GFF have increased 40% for fiscal 2022 (ending September 2022). The stock has declined 13.2% in the past three months.
Carlisle Companies Incorporated (CSL - Free Report) presently carries a Zacks Rank of 1. CSL delivered a trailing four-quarter earnings surprise of 23%, on average.
Earnings estimates for CSL have increased 10.8% for 2022 in the past 60 days. Its shares have rallied 25.3% in the past three months.
Ferguson plc (FERG - Free Report) is presently Zacks #2 Ranked. FERG’s earnings surprise in the last four quarters was 14.2%, on average.
In the past 60 days, the stock’s earnings estimates have increased 6.5% for fiscal 2022 (ending July 2022). The same has declined 16.3% in the past three months.