UPDATE 2-ITT Corp posts profit, lowers outlook

* Q1 EPS 72 cents excl items vs. estimate 58 cents

* Full-year forecast cut

* Shares edge down (Adds Reuters estimates, CEO comment)

ATLANTA, April 24 (Reuters) - ITT Corp (ITT.N) posted higher-than-expected first-quarter profit on Friday as it cut costs, but the diversified manufacturer pared its full-year forecast as a slowdown in commercial markets pressured sales.

"The markets that we serve that are directly attached to automotive -- our general industrial and our residential and commercial businesses -- continue to be sluggish," ITT Chief Executive Steve Loranger said in an interview.

The maker of wastewater pumps and military equipment said net income rose to $184.1 million, or $1.01 a diluted share, from $171.9 million, or 93 cents a share, a year earlier.

Excluding items including a $54 million tax benefit, profit from continuing operations was 72 cents a share. On that basis, analysts expected 58 cents, according to Reuters Estimates.

Quarterly revenue fell 9 percent to $2.6 billion.

Revenue fell 16 percent at the fluid technology segment on softer residential and commercial markets. Sales dropped 27 percent at the motion and flow control unit, which supplies parts to automotive and aerospace.

Revenue in the defense segment, which accounts for about 55 percent of overall company revenue, was about flat in the quarter.

ITT, based in White Plains, New York, has been cutting headcount, consolidating plants and moving production to lower-cost areas to pare expenses.

The company said it now expected full-year earnings of $3.20 to $3.60 a share from continuing operations, excluding items, compared with a February forecast of $3.60 to $4.00.

Full-year revenue is now forecast at $10.6 billion to $11.0 billion, compared with the previous view of $11.0 billion to $11.2 billion.

ITT shares were off 13 cents at $42.18 in morning York Stock Exchange trading. (Reporting by Karen Jacobs; Editing by Lisa Von Ahn)