ITT beats forecasts as demand picks up in emerging markets
(Reuters) - ITT Corp (ITT.N) reported stronger-than-expected quarterly earnings and sales on Friday, helped by U.S. industrial demand and sales to energy markets in emerging economies, lifting its shares 1.6 percent to their highest level since May.
The maker of specialty components for energy, transportation and manufacturing said it had earned $73.0 million, or 78 cents per share, in the third quarter, compared with $108.5 million, or $1.17 per share, a year earlier.
Excluding special items, ITT earned 44 cents a share, 5 cents above Wall Street expectations, according to Thomson Reuters I/B/E/S.
Sales rose 8 percent to $555.9 million, also beating analysts' estimates.
ITT - which spun off its defense unit ITT Exelis (XLS.N) and water business Xylem (XYL.N) last year - said sales to energy and mining markets in emerging countries helped lift industrial process sales by 27 percent. The division, ITT's biggest, makes valves and pumps, and the company announced an acquisition last month to expand in this area.
ITT's auto and rail business profits rose even though the strong dollar eroded any sales gains. European car manufacturers are curtailing output but ITT believes its brake pads are taking market share, Chief Executive Denise Ramos said in an interview.
"We've been seeing the softness others have been seeing. Europe is weak," she said. "We're able to offset that somewhat due to share gains."
ITT rivals include Federal-Mogul (FDML.O), Honeywell (HON.N), and Japan's Akebono (7238.T). Customers include Germany's BMW (BMWG.DE), Daimler (DAIGn.DE), Audi (NSUG.DE) and Volkswagen (VOWG_p.DE), as well as Ford (F.N) and Fiat (FIA.MI).
The company is building a brake pad manufacturing and research facility in China, Ramos said. Overall, emerging markets account for more than a quarter of company sales.
The White Plains, New York-based company kept its full-year profit forecast unchanged at the midpoint while narrowing the range to between $1.64 and $1.70 per share. ITT closed its headquarters for two days during this week's storm and delayed its earnings release.
Ramos, who lived in California for 20 years, said she has never felt a building sway as intensely as her high-rise did during the storm.
"An earthquake jolts and sways for a couple of seconds. This lasted much more than a couple of seconds," she said.
(Reporting by Nick Zieminski in New York; Editing by Lisa Von Ahn and Diane Craft)
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