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ITT Tops Q2 Earnings & Revenue Estimates, Revises '18 View

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ITT Inc. (ITT - Free Report) reported better-than-expected results in second-quarter 2018.

Earnings/Revenues

Quarterly adjusted earnings came in at 82 cents per share, up 26.2% year over year. The bottom line also surpassed the Zacks Consensus Estimate of 78 cents.

Revenues in the reported quarter were $696.8 million, up 10.4% year over year. The top line also outpaced the Zacks Consensus Estimate of $682 million.

Segmental Break-Up

Revenues in the Industrial Process segment came in at $203.2 million, up 5.7% year over year. Top-line results in the Motion Technologies segment improved 13.9% year over year to $330.3 million. The Connect & Control Technologies segment’s Q2 revenues came in at $164.1 million, up 9.7% year over year.

ITT Inc. Price, Consensus and EPS Surprise

 

ITT Inc. Price, Consensus and EPS Surprise | ITT Inc. Quote

Costs/Margins

Cost of sales in the reported quarter came in at $470.8 million, higher than $425.9 million recorded in the year-ago quarter. Gross profit margin was 32.4%, down 10 basis points (bps) year over year.

Sales and marketing expenses in the second quarter was $43.4 million, marginally rising 1% year over year. Operating margin in the quarter was 11.5%, up 210 bps year over year.

Balance Sheet/Cash Flow

Exiting the June-end quarter, this Zacks Rank #3 (Hold) company had cash and cash equivalents of $449.6 million, higher than $389.8 million recorded as of Dec 31, 2017. Aggregate non-current liabilities were $1,177.8 million, lower than $1,203 million recorded in 2017-end.

In first-half 2018, the company generated $119.3 million cash from operating activities, up from $92.6 million posted in the comparable period last year. Capital expenditures were $46.3 million, down from $53.3 million recorded in the year-ago tally.

Outlook

ITT is poised to boost its near-term competency on the back of stronger end-market demand and greater operational excellence. The company revised its earnings view for 2018 from $2.95-$3.15 per share to $3.05-$3.15 per share. Organic revenue growth is predicted to lie in the band of 3-5%.

Stocks to Consider

Some better-ranked stocks in the Zacks Conglomerates sector are listed below:

Crane Company (CR - Free Report) carries a Zacks Rank #2 (Buy). The company pulled off an average positive earnings surprise of 3.03% over the last four quarters.  You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Carlisle Companies Incorporated (CSL - Free Report) also has a Zacks Rank of 2. The company generated an average positive earnings surprise of 12.85% in the trailing four quarters.

Macquarie Infrastructure Company (MIC - Free Report) is another Zacks #2 Ranked company. The stock came up with an average positive earnings surprise of 8.05% over the preceding four quarters.

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