ITT reports solid 2008 fourth quarter and full-year results
* Fourth quarter 2008 revenue up 17 percent year-over-year to $2.9 billion, earnings from continuing operations up 37 percent to 96 cents per share
* Full-year 2008 revenue up 30 percent compared to prior year to $11.7 billion, earnings from continuing operations up 23 percent to $4.23 per share
* Ends 2008 with free cash flow of $871 million, a 112 percent conversion of income from continuing operations
* Previous 2009 earnings per share guidance of $3.60 to $4.00 maintained
WHITE PLAINS, N.Y. – ITT Corporation (NYSE: ITT) today reported 2008 fourth quarter revenue of $2.9 billion and income from continuing operations of $176 million, or 96 cents per share. Excluding special items, income from continuing operations for the quarter was $149 million, or 82 cents per share, up a penny year-over-year as benefits from recent acquisitions and operational improvements offset higher costs from aggressive restructuring and realignment activities.
For the full-year 2008, ITT reported record revenues of $11.7 billion and income from continuing operations of $775 million, or $4.23 per share. Excluding special items, income rose to $741 million, or $4.04 per share, representing 23 percent earnings growth year-over-year. Free cash flow, representing cash from operations less capital expenditures, for the year topped $871 million, a 112 percent conversion of income from continuing operations.
“Despite a global economic environment that deteriorated as the year progressed, our business continued to perform on the strength of a well-balanced portfolio and teams that met the adversity in their markets head on,” said Steve Loranger, ITT’s chairman, president and chief executive officer. “And while we expect 2009 to be more difficult, we take great pride in having achieved another record year of revenue and earnings growth in 2008.”
Loranger added, “We are maintaining our previous 2009 earnings guidance. While the challenges that lie ahead are significant, we believe our leaders are taking the necessary actions to best position the company for these difficult times. And while we’ve made some tough choices in recent months to manage costs aggressively, we remain committed to our long-term strategies and will continue to invest in our future success.”
2008 Fourth Quarter and Full-Year Business Segment Results
Defense Electronics & Services
* Fourth quarter 2008 revenue for the Defense Electronics & Services segment was up 39 percent, compared to the year ago period, to $1.6 billion, on strong organic revenue growth of seven percent. ITT’s Advanced Engineering & Sciences and Night Vision businesses led the growth. Fourth quarter operating income for the segment grew to $188 million, up 50 percent on a comparable basis.
* Full-year 2008 revenue for the segment reached $6.3 billion, up 50 percent over 2007, primarily attributable to eight percent organic revenue growth and the successful integration of EDO Corporation. For the full year, operating income for the segment was $727 million, a 45 percent improvement year-over-year.
* At the close of 2008, the Defense segment had a funded backlog of $5.24 billion, providing good visibility into the year ahead.
* ITT’s Fluid Technology segment reported fourth quarter 2008 revenue of $984 million, roughly flat on a year-over-year basis, with solid organic revenue growth of seven percent, offset by the negative impact of foreign currency exchange. Fourth quarter segment operating income was $96 million, which is down 24 percent from the comparable prior year period due primarily to higher costs associated with aggressive restructuring activity during the quarter.
* For the full-year 2008, the segment grew nine percent year-over-year on revenue of $3.8 billion, including solid organic revenue growth of eight percent. The segment generated operating income of $469 million, up eight percent on a comparable basis, as organic growth and productivity improvements more than offset negative impacts from restructuring and foreign currency exchange.
Motion & Flow Control
* Fourth quarter 2008 revenue for the Motion & Flow Control segment was down 12 percent on comparable basis to $327 million. Organic revenue declined nine percent with challenging conditions in many of the segment’s end markets including marine and automotive. The segment reported a fourth quarter operating loss of $4 million, as lower volume, restructuring activity and costs associated with business dispositions during the quarter significantly offset productivity improvements and favorable foreign currency exchange.
* Full-year 2008 revenue for the segment was $1.6 billion, up 19 percent over 2007. For the year, operating income grew two percent on a comparable basis to $192 million.
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