We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ITT's Q1 Earnings & Revenues Beat Estimates, 2018 View Up
Read MoreHide Full Article
ITT Inc. (ITT - Free Report) posted adjusted earnings of 77 cents per share in first-quarter 2018, surpassing the Zacks Consensus Estimate of 73 cents. The reported figure also improved 20.3% from the year-ago tally of 64 cents.
The impressive bottom-line performance can be primarily attributable to the company’s initiatives to drive operational improvements. Also, solid improvement in revenues along with robust market growth strategies in key global-end markets contributed to the upside.
Inside the Headlines
In the reported quarter, revenues came in at $689.3 million, up 10.1% on a year-over-year basis. The top-line figure also outpaced the Zacks Consensus Estimate of $676 million. The year-over-year improvement in revenues was owing to strength in Motion Technologies, led by strong performance in global OEM automotive brake pads as well as growth in the China high-speed rail market. Additionally, strength in petrochemical and general industrial markets contributed significantly to the improvement. On a year-over-year basis, organic revenues also increased 2% driven by strength in emerging markets and transportation.
Segment-wise, Industrial Process revenues were up 2% year over year to $190 million. The upside came on the back of growth in aftermarket service, partly offset by project declines in the oil and gas markets.
Total revenues at the Connect and Control Technologies segment increased 3% to $158 million. However, organic revenues were flat in the reported quarter. Strength in commercial aerospace and increase in demand for electric vehicle as well as oil and gas connectors reflected well in the segment’s performance. Notably, this segment was formed by integrating the Interconnect Solutions and Control Technologies segments for streamlining operations, capitalizing on shared infrastructure and driving long-term growth in target markets.
Motion Technologies revenues continued with the strong momentum and increased 19% year over year to $342 million. Also, organic revenues rose 4%. Meanwhile, solid growth in global OEM automotive brake pads as well as impressive performance by China’s high-speed rail market proved conducive to the segment. In addition, favorable impact of foreign exchange and Axtone acquisition drove the top line at this segment.
ITT’s adjusted segment operating income advanced 22% year over year to a record $103 million. This uptick was mainly driven by strong productivity, higher volumes, restructuring benefits, improved performance on pump projects and favorable impacts of foreign exchange.
Liquidity
As of Mar 31, 2018, the company had cash and cash equivalents of $439.9 million (including restricted cash), significantly up from $349.5 million in the year-ago quarter.
2018 Guidance
Concurrent with the first-quarter earnings release, ITT raised mid-point of its 2018 adjusted EPS guidance, projected earlier. The company anticipates adjusted EPS in the range of $2.95-$3.15 compared with the previous guidance of $2.85-$3.15. The upward revision was backed by stable market dynamics as well as improved operational execution.
Our Take
ITT’s diversified operations across key-end markets, geographies and business cycles are among its biggest strengths, which help in offsetting weakness in a single market. Furthermore, the company’s three-pronged strategy through optimizing execution, effective capital deployment and market expansion keeps its operational performance steady.
Meanwhile, ITT’s focus on business streamlining, cost controls and efficiency continues to bolster financial performance.
However, this Zacks Rank #3 (Hold) company remains prone to risks from uncertainty in the global macro-economic environment, especially weak industrial markets. Going ahead, restrained client spending and higher commodity costs might restrict ITT’s growth.
Crane has an excellent earnings surprise history, surpassing estimates in the trailing four quarters, with an average beat of 2.1%.
Danaher has an excellent earnings surprise history, exceeding estimates in the trailing four quarters, with an average beat of 4.1%.
Raven Industries has a decent earnings surprise history, outpacing estimates thrice in the trailing four quarters, with an average beat of 20.2%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
ITT's Q1 Earnings & Revenues Beat Estimates, 2018 View Up
ITT Inc. (ITT - Free Report) posted adjusted earnings of 77 cents per share in first-quarter 2018, surpassing the Zacks Consensus Estimate of 73 cents. The reported figure also improved 20.3% from the year-ago tally of 64 cents.
The impressive bottom-line performance can be primarily attributable to the company’s initiatives to drive operational improvements. Also, solid improvement in revenues along with robust market growth strategies in key global-end markets contributed to the upside.
Inside the Headlines
In the reported quarter, revenues came in at $689.3 million, up 10.1% on a year-over-year basis. The top-line figure also outpaced the Zacks Consensus Estimate of $676 million. The year-over-year improvement in revenues was owing to strength in Motion Technologies, led by strong performance in global OEM automotive brake pads as well as growth in the China high-speed rail market. Additionally, strength in petrochemical and general industrial markets contributed significantly to the improvement. On a year-over-year basis, organic revenues also increased 2% driven by strength in emerging markets and transportation.
ITT Inc. Price, Consensus and EPS Surprise
ITT Inc. Price, Consensus and EPS Surprise | ITT Inc. Quote
Segment-wise, Industrial Process revenues were up 2% year over year to $190 million. The upside came on the back of growth in aftermarket service, partly offset by project declines in the oil and gas markets.
Total revenues at the Connect and Control Technologies segment increased 3% to $158 million. However, organic revenues were flat in the reported quarter. Strength in commercial aerospace and increase in demand for electric vehicle as well as oil and gas connectors reflected well in the segment’s performance. Notably, this segment was formed by integrating the Interconnect Solutions and Control Technologies segments for streamlining operations, capitalizing on shared infrastructure and driving long-term growth in target markets.
Motion Technologies revenues continued with the strong momentum and increased 19% year over year to $342 million. Also, organic revenues rose 4%. Meanwhile, solid growth in global OEM automotive brake pads as well as impressive performance by China’s high-speed rail market proved conducive to the segment. In addition, favorable impact of foreign exchange and Axtone acquisition drove the top line at this segment.
ITT’s adjusted segment operating income advanced 22% year over year to a record $103 million. This uptick was mainly driven by strong productivity, higher volumes, restructuring benefits, improved performance on pump projects and favorable impacts of foreign exchange.
Liquidity
As of Mar 31, 2018, the company had cash and cash equivalents of $439.9 million (including restricted cash), significantly up from $349.5 million in the year-ago quarter.
2018 Guidance
Concurrent with the first-quarter earnings release, ITT raised mid-point of its 2018 adjusted EPS guidance, projected earlier. The company anticipates adjusted EPS in the range of $2.95-$3.15 compared with the previous guidance of $2.85-$3.15. The upward revision was backed by stable market dynamics as well as improved operational execution.
Our Take
ITT’s diversified operations across key-end markets, geographies and business cycles are among its biggest strengths, which help in offsetting weakness in a single market. Furthermore, the company’s three-pronged strategy through optimizing execution, effective capital deployment and market expansion keeps its operational performance steady.
Meanwhile, ITT’s focus on business streamlining, cost controls and efficiency continues to bolster financial performance.
However, this Zacks Rank #3 (Hold) company remains prone to risks from uncertainty in the global macro-economic environment, especially weak industrial markets. Going ahead, restrained client spending and higher commodity costs might restrict ITT’s growth.
Stocks to Consider
A few better-ranked stocks in the same industry are Crane Company (CR - Free Report) , Danaher Corporation (DHR - Free Report) and Raven Industries, Inc. . Each of these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Crane has an excellent earnings surprise history, surpassing estimates in the trailing four quarters, with an average beat of 2.1%.
Danaher has an excellent earnings surprise history, exceeding estimates in the trailing four quarters, with an average beat of 4.1%.
Raven Industries has a decent earnings surprise history, outpacing estimates thrice in the trailing four quarters, with an average beat of 20.2%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>