ITT Corp.'s 4Q Net Profit Up 7.3%; Raises 2010 Outlook

ITT Corp. (ITT) reported a 7.3% increase in fourth-quarter net profit, helped by an improved performance in the company's motion and flow control business.

Net income for the defense and industrial conglomerate rose to $199.2 million, or $1.08 a share, from $185.5 million, or $1.01 cents a share, a year earlier. Revenue in the quarter slipped 2.6% to $2.87 billion.

Excluding gains from tax adjustments and discontinued operations, the White Plains, N.Y., company earned 97 cents a share, beating Wall Street analysts' estimate of 93 cents a share.

The company raised its 2010 profit outlook to a range of $3.90 a share to $4.10 a share from $3.85 to $4.05 previously. The $4 mid-point of the revised guidance is roughly in line with the $4.01 a share projected by analysts surveyed by Thomson Reuters.

Chairman and Chief Executive Steve Loranger said the higher earnings forecast was prompted by improved productivity, lower restructuring expenses and confidence that the company's products and services will grow at a higher rate than the markets they compete in.

ITT's motion and flow control unit, which supplies equipment and components to the automotive, aerospace, rail and beverage industries, reported a 1.7% increase in fourth-quarter revenue to $332 million. Operating income from the quarter was $16.7 million, compared with a $3.6 million loss a year earlier. The company attributed the improvement to raising order volumes, particularly from European auto makers and the beverage industry, as well as productivity gains and lower business realignment expenses.

In ITT's defense business, which has been the company's best-performing segment in recent quarters, revenue fell 1.2% to $1.62 billion. Lower sales of tactical radios were offset by revenue growth from service contracts and night vision goggles used by U.S. soldiers in Afghanistan and Iraq. The company said productivity improvements helped boost operating income from the unit by nearly 11% to $207.1 million.

At the end of 2009, the defense business had a funded order backlog of $5.2 billion, nearly the same amount as at the end of 2008.

In ITT's fluid technology unit, which makes pumps for residential water plants and industrial processes, fourth-quarter revenue fell 6.1% to $924.3 million because of weakness in U.S. residential housing construction and lower capital spending by companies. Nevertheless, operating income from the unit rose 9.2% to $104.5 million on lower restructuring expenses and favorable exchange rates for foreign currency.

For 2009, ITT earned $643.7 million, or $3.50 a share, on revenue of $10.9 billion.

ITT's stock Tuesday closed up 3.4%, or $1.69, at $50.45 a share.

-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com

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