ITT Forecasts Strong 2008, Expects Another Year of Double-Digit Earnings Growth from Continuing Operations

WHITE PLAINS, N.Y., Nov. 13 /PRNewswire/ -- ITT Corporation (NYSE: ITT) today announced its full-year 2008 earnings forecast in the range of $3.95 to $4.10 per share, excluding special items, reflecting anticipated 12 to 17 percent earnings...


WHITE PLAINS, N.Y., Nov. 13 /PRNewswire/ -- ITT Corporation (NYSE: ITT) today announced its full-year 2008 earnings forecast in the range of $3.95 to $4.10 per share, excluding special items, reflecting anticipated 12 to 17 percent earnings growth compared to the midpoint of ITT's 2007 full-year guidance. The company expects top-line revenue to be $9.5 billion to $9.7 billion in 2008, approximately 10 percent higher than anticipated revenue for the current year. Revenue growth expectations include nearly eight percent organic growth and full-year revenues of the recently acquired International Motion Control (IMC), a global leader in the design and manufacture of motion and flow control components.

ITT reaffirmed its current year earnings guidance from continuing operations, excluding special items, of $3.50-$3.53 per share on projected revenue of $8.75 billion.

"We are expecting 2007 to finish strong and anticipate this year's performance will provide a springboard for another exciting year of growth and continued operational improvements for our company in 2008," said Steve Loranger , chairman, president and chief executive officer of ITT. "Our guidance reflects a high degree of confidence in our leadership team and the company's core businesses, which we believe are well-positioned for success over the long term."

Loranger added the company has been effective at positioning its portfolio - in terms of end markets and geographies served - to be able to balance a moderating U.S. economy and capitalize on strength in international markets.

2008 Segment Guidance

Defense Electronics & Services

ITT's Defense segment expects revenues to grow eight to nine percent to $4.35 billion to $4.40 billion in 2008, led by continued growth in the Advanced Engineering & Sciences and Systems businesses. Operating margins, excluding restructuring costs, are expected to be slightly higher than 2007 estimates. Operating margins for the segment are projected to be in the 12.7 to 12.9 percent range. ITT's 2008 guidance does not include the potential impact of the company's pending acquisition of EDO Corporation, which will be voted on by EDO shareholders on Dec. 18 .

Fluid Technology

The Fluid Technology segment is expecting revenue growth of seven to eight percent in 2008 to $3.68 billion to $3.73 billion, and operating margin expansion of approximately 45 basis points. The segment's operating margin, excluding restructuring costs, is expected to be in the range of 13.9 to 14.2 percent. ITT's estimates account for a constraint of 20 basis points due to the unfavorable foreign currency impact of a weak U.S. dollar.

Motion & Flow Control

Top-line revenue in the Motion & Flow Control segment is expected to increase 18 to 22 percent to $1.53 billion to $1.58 billion in 2008, largely attributable to the integration of IMC into the group. The segment's operating margin, excluding restructuring costs, is expected to expand 50 basis points to 14.9 to 15.1 percent, after the amortization of intangibles related to the IMC acquisition.

Change in Reporting Presentation Planned

ITT has historically presented restructuring costs as a "special item" in its delivery of adjusted earnings per share (EPS) results to investors. Beginning in 2008, the company will discontinue this practice. Restructuring costs will no longer be treated as a special item and will be presented as part of ITT's total adjusted EPS figure.

"In a dynamic multi-industry business like ours, restructuring is a variable, but ongoing activity," said Denise Ramos , chief financial officer of ITT. "For this reason, we decided to no longer classify restructuring costs as a special or one-time item. We believe the revised presentation of adjusted EPS will provide investors with a more complete view of our overall performance and is consistent with the company's track record of transparent reporting of results."

This content continues onto the next page...