Financial Data and Key Metrics Changes - ITT delivered nearly $1 billion in total orders for the third consecutive quarter, up 3% year-over-year [6] - Revenue grew 13% in total and 6% organically, reaching $999 million [7] - Operating income grew nearly twice the organic sales growth rate, with operating margin expanding over 100 basis points excluding M&A [7] - Adjusted EPS increased by 21%, and free cash flow grew 46% to $368 million year-to-date, with expectations to reach $500 million for the full year [7][10] - Free cash flow margin in the quarter was over 15%, surpassing the high end of the 2030 target [7] Business Line Data and Key Metrics Changes - Industrial Process (IP) grew 11% organically, driven by projects which grew over 50% [8][17] - Connect and Control Technologies (CCT) delivered 25% total growth, with 6% organic growth, supported by defense momentum and aerospace demand [9][17] - Motion Technologies (MT) grew 4% organically, outperforming global auto production, particularly in China [9][17] - IP margins expanded by 70 basis points to nearly 22%, while CCT margins grew by 270 basis points excluding Casoria dilution [9][18] Market Data and Key Metrics Changes - Orders in the Defense and Aerospace sectors were strong, with CCT orders up 27% and 6% organic growth [11] - Market share in China increased from 31% to above 34% [11] - Svanehøj secured over $250 million in orders year-to-date, representing 59% growth compared to the prior year [13] Company Strategy and Development Direction - The company is focused on organic growth and margin expansion, compounded with M&A activities [6] - ITT aims to achieve a book-to-bill ratio above one for the full year, positioning itself for growth in 2026 [15] - Continued investment in innovations like Vidar and Geopad is a priority, with expectations for significant contributions from acquisitions [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong operational performance and the ability to exceed previous guidance [20] - The outlook for 2026 is cautiously optimistic, with expectations for low double-digit growth driven by a strong backlog and project wins [46][85] - Management noted that while the automotive market is facing challenges, ITT's market share is expected to increase due to new product introductions [82] Other Important Information - The company is raising its full-year Adjusted EPS outlook, with the low end of the revised guidance now above the previous high end [10] - The effective tax rate is expected to be lower than planned, contributing positively to earnings [20] Q&A Session Summary Question: Insights on global auto production and its future - Management noted that global auto production was up 2% year-over-year, with China showing significant growth while Europe and North America are forecasted to decline slightly [35] Question: Confidence in the funnel for Industrial Process - Management indicated that the funnel is up 22% year-over-year, with strong activity in green projects and a healthy outlook for future orders [36][37] Question: Breakdown of the $0.20 guidance raise - The guidance raise is attributed to higher revenue, improved margins, and a favorable tax rate [43] Question: Market outlook for 2026 - Management expressed optimism about entering 2026 with a strong backlog, particularly in aerospace and defense [46] Question: Short cycle orders in Industrial Process - Management reported strong activity in parts and valves, with a notable increase in short cycle orders [50] Question: M&A opportunities and attractiveness of the funnel - The M&A funnel is rich with opportunities, primarily focused on pumps and valves, with a rigorous process in place to ensure value creation [60] Question: Impact of FX on Motion Technologies margins - FX transactions had a negative impact in absolute terms but provided a year-over-year benefit of around 100 basis points [113]

Financial Data and Key Metrics Changes - ITT delivered nearly $1 billion in total orders for the third consecutive quarter, up 3% year-over-year [6] - Revenue grew 13% in total and 6% organically, reaching $999 million [7] - Operating income grew nearly twice the organic sales growth rate, with operating margin expanding over 100 basis points excluding M&A [7] - Adjusted EPS increased by 21%, and free cash flow grew 46% to $368 million year-to-date, with an expected full-year free cash flow of $500 million [7][10] - Free cash flow margin in the quarter was over 15%, surpassing the high end of the 2030 target [7] Business Line Data and Key Metrics Changes - Industrial Process (IP) grew 11% organically, driven by projects which grew over 50% [8] - Connect and Control Technologies (CCT) delivered 25% total growth, with 6% organic growth, supported by defense momentum and aerospace demand [9] - Motion Technologies (MT) grew 4% organically, outperforming global auto production, particularly in China [9] - Profitability improved across segments, with IP margins expanding to nearly 22% and CCT margins growing 270 basis points excluding Casoria dilution [9][18] Market Data and Key Metrics Changes - Orders have grown 19% over the last three years, exceeding $3 billion, with strength in Defense, Aero, Rail, and Energy Transition markets [11] - Market share in China increased from 31% to above 34% [11] - CCT orders were up 27%, with a book-to-bill comfortably above 1 [12] - Svanehøj secured over $250 million in orders year-to-date, representing 59% growth versus the prior year [13] Company Strategy and Development Direction - The company is focused on organic growth and margin expansion, compounded with M&A activities [6] - Continued investment in innovations like Vidar and Geopad, with expectations for significant contributions from acquisitions [10][19] - The company aims for a book-to-bill above one for the full year, positioning for growth in 2026 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and the ability to exceed previous guidance for revenue and EPS [21] - The outlook for 2026 is cautiously optimistic, with expectations for low double-digit growth driven by a strong backlog and project wins [46][86] - Management noted that while auto production is expected to grow, challenges remain in Europe and North America due to competitive pressures [82] Other Important Information - The company is raising its full-year adjusted EPS outlook, with the low end of the revised guidance now above the previous high end [10] - Management highlighted the importance of maintaining rigorous processes for future M&A opportunities [61] Q&A Session Summary Question: Global auto production outlook - Management noted that global auto production was up 2% year-over-year, with China showing significant growth while Europe and North America are forecasted to decline slightly [35] Question: Industrial Process funnel and order conversion - The funnel for active projects is up 22% year-over-year, indicating strong potential for order conversion [36] Question: Breakdown of EPS guidance raise - The $0.20 EPS guidance raise is attributed to improved profitability, better acquisitions, and a lower tax rate [43] Question: Market dynamics and growth areas - Management highlighted strong growth in aerospace and defense, with expectations for continued growth in these sectors [46] Question: Short cycle orders in Industrial Process - Short cycle orders were up 5%, with strong activity in parts and valves, particularly in the medical sector [50] Question: M&A opportunities and funnel attractiveness - The M&A funnel is rich with opportunities, primarily focused on pumps and valves, with a rigorous process in place to ensure value creation [60] Question: Margin expectations for CCT - CCT margins are expected to benefit from aerospace recovery and pricing power, with a focus on operational efficiencies [97]

Financial Data and Key Metrics Changes - ITT reported total orders of nearly $1 billion for the third consecutive quarter, up 3% year-over-year, supported by strong order intake from recent acquisitions [7] - Revenue grew 13% in total and 6% organically, reaching $999 million, with operating income growing nearly twice the organic sales growth rate [8][17] - Adjusted EPS increased by 21%, and free cash flow rose 46% to $368 million year-to-date, with expectations to reach the high end of the previous range at $500 million for the full year [8][11] - Operating margin expanded over 100 basis points, excluding M&A impacts, with free cash flow margin in the quarter exceeding 15% [8][11] Business Line Data and Key Metrics Changes - Industrial Process (IP) grew 11% organically, driven by a projects business that grew over 50% [9][17] - Connect and Control Technologies (CCT) delivered 25% total growth, with 6% organic growth, bolstered by defense momentum and aerospace demand [10][17] - Motion Technologies (MT) grew 4% organically, outperforming global auto production by 360 basis points, with significant contributions from China [10][17] Market Data and Key Metrics Changes - Orders in the defense and aerospace sectors were strong, with CCT orders up 27% and 6% organic growth [12] - The market share in China for ITT has increased from 31% to above 34% [12] - Svanehøj secured over $250 million in orders year-to-date, representing 59% growth compared to the previous year [14] Company Strategy and Development Direction - The company is focused on organic growth and margin expansion, compounded with M&A activities, aiming for a strong performance towards its 2030 targets [7][25] - ITT continues to invest in innovations like Vidar, which is being installed with major energy companies in North America [8][11] - The company expects to maintain a book-to-bill ratio above one for the full year, indicating a strong position for growth in 2026 [15][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and the ability to deliver for customers and shareholders despite market challenges [11][20] - The outlook for 2026 is cautiously optimistic, with expectations for low double-digit growth driven by a strong backlog and project wins [50][92] - Management noted that while auto production is expected to be up 2% year-over-year, challenges remain in Europe and North America [37][89] Other Important Information - The company is raising its full-year adjusted EPS outlook, with the low end of the revised guidance now above the previous high end, reflecting strong operational performance [11][21] - The effective tax rate is expected to be lower than planned, contributing positively to the EPS outlook [20][22] Q&A Session Summary Question: What is the outlook for global auto production? - Management indicated that global auto production is expected to be up 2% year-over-year, with China showing significant growth while Europe and North America may see slight declines [37][89] Question: Can you provide insights on the funnel and order conversion in Industrial Process? - The funnel for active projects is up 22% year-over-year, indicating strong potential for order conversion [39] Question: What factors contributed to the $0.20 guidance raise? - The guidance raise is attributed to improved profitability, better performance from acquisitions, and a favorable tax rate [47] Question: How is the pricing environment evolving? - The pricing environment varies by business segment, with CCT showing more pricing power, while IP requires a more strategic approach [113] Question: What are the prospects for improving growth in Aerospace and Defense? - Management expects continued growth in Aerospace and Defense, with orders anticipated to accelerate in Q4 [123]

Core Insights - ITT reported quarterly earnings of $1.78 per share, exceeding the Zacks Consensus Estimate of $1.67 per share, and up from $1.46 per share a year ago [1] - The earnings surprise was +6.59%, and the company has surpassed consensus EPS estimates in all four of the last quarters [2] - Revenues for the quarter reached $999.1 million, surpassing the Zacks Consensus Estimate by 2.23%, and up from $885.2 million year-over-year [3] Earnings Performance - ITT's earnings surprise of +6.59% indicates strong performance relative to expectations [2] - The company has consistently exceeded earnings estimates, achieving this in four consecutive quarters [2] Revenue Analysis - The reported revenue of $999.1 million reflects a significant increase from the previous year's $885.2 million [3] - ITT has also topped consensus revenue estimates in three of the last four quarters [3] Stock Performance - ITT shares have increased by approximately 23.1% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [4] - The future price movement of ITT's stock will largely depend on management's commentary during the earnings call [4] Future Outlook - Current consensus EPS estimate for the upcoming quarter is $1.75 on $1 billion in revenues, and for the current fiscal year, it is $6.51 on $3.87 billion in revenues [8] - The Zacks Rank for ITT is 2 (Buy), indicating expectations for the stock to outperform the market in the near future [7] Industry Context - The Diversified Operations industry, to which ITT belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable outlook [9] - Historical data indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than a factor of 2 to 1 [9]

Financial Performance Highlights - Total revenue grew by 13% to $999 million in Q3 2025[7, 16] - Organic growth reached 6% in Q3 2025[7, 8] - Adjusted EPS grew by 21% to $1.78 in Q3 2025[8, 19] - Free cash flow increased by 77% in Q3 2025[8] - Year-to-date free cash flow reached $368 million, a 46% increase[20] Segment Performance - Industrial Process (IP) organic revenue grew by 11%[9, 31] - Connect & Control Technologies (CCT) organic revenue grew by 6%[9, 31] - Motion Technologies (MT) adjusted operating margin reached 20.2%, a 210 bps increase[9, 31] Orders and Backlog - Orders grew by 19% in total[11] - Svanehøj orders increased by 59% year-to-date[13] - kSARIA orders increased by 58% year-to-date[13] Guidance - The company is raising its full-year adjusted EPS range to $6.62 - $6.68[7, 25] - The company expects approximately $500 million in free cash flow for the full year[9, 25]

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Financial Performance - ITT reported Q3 2025 revenue of $999 million, a 13% increase (6% organic) compared to the prior year, driven by strength in pump projects and aerospace and defense[2]. - Operating income for Q3 2025 was $180 million, a 14% decrease year-over-year, while adjusted operating income increased by 14% to $184.7 million[3][4]. - Q3 2025 EPS was $1.62, down 18% from the previous year, but adjusted EPS rose 21% to $1.78 due to operational improvements and acquisitions[4]. - Revenue for the three months ended September 27, 2025, was $999.1 million, a 12.9% increase from $885.2 million in the same period of 2024[26]. - Operating income decreased to $179.8 million from $208.6 million, indicating a decline of 13.8% year-over-year[26]. - Net income attributable to ITT Inc. was $126.9 million, down from $161.6 million, representing a 21.4% decrease[26]. - Basic earnings per share decreased to $1.63 from $1.98, a decline of 17.7%[26]. - Revenue for the nine months ended September 27, 2025, was $2,884.5 million, compared to $2,701.7 million for the same period in 2024, indicating a growth of 6.8%[48]. Cash Flow and Assets - Net cash from operating activities increased by 40% to $174 million, and free cash flow surged 77% to $154 million compared to Q3 2024[5][6]. - Cash and cash equivalents rose to $516.4 million from $439.3 million, reflecting a 17.6% increase[27]. - Free cash flow for the nine months ended September 27, 2025, was $441.0 million, compared to $339.4 million in the prior year[28]. - Free cash flow for Q3 2025 was $154.1 million, with a free cash flow margin of 15.4%, up from 9.9% in Q3 2024[48]. - The company reported a net cash from operating activities of $173.9 million for Q3 2025, compared to $123.9 million in Q3 2024[48]. Guidance and Outlook - The company is raising its full-year guidance, expecting total revenue growth of 6% to 7% and adjusted EPS growth of 13% to 14% for 2025[14]. - The company provided full-year 2025 EPS guidance from continuing operations at $6.16 to $6.22, with adjusted EPS expected between $6.62 and $6.68[45]. Segment Performance - The Motion Technologies segment reported revenue of $355.6 million, a 3.1% increase, while Industrial Process revenue rose 15% to $383.9 million[10][11]. - Connect & Control Technologies revenue increased by 25.1% to $259.2 million, primarily driven by the kSARIA acquisition[12]. - Organic revenue growth was reported at 6.1% for the third quarter of 2025[34]. - Organic orders in Q3 2025 showed a decline of 2.2% in MT, 9.9% in IP, and a growth of 5.5% in CCT compared to Q3 2024[36]. Backlog and Orders - ITT's backlog stands at approximately $2 billion, indicating further growth opportunities in core markets and from acquisitions[9]. - In Q3 2025, total orders reached $991.0 million, with organic orders at $923.6 million, reflecting a decline of 3.6% year-over-year[36]. Margins and Profitability - Adjusted operating margin for Q3 2025 was 18.5%, an increase of 20 basis points compared to the prior year[3][7]. - Reported operating margin for Q3 2025 was 18.0%, down from 23.6% in Q3 2024, while adjusted operating margin was 18.5%[38]. - Gross profit increased to $355.2 million, up from $314.7 million, reflecting a gross margin improvement[26]. - Adjusted income from continuing operations per diluted share was not specified but is considered a key performance indicator for evaluating ongoing profitability[32]. Dividends - The company announced a quarterly dividend of $0.351 per share, payable on December 31, 2025[13].

STAMFORD, Conn.--(BUSINESS WIRE)--ITT reports 2025 third quarter earnings per share (EPS) of $1.62, Adjusted EPS of $1.78; Raising full year guidance. ...

Core Insights - Investors are evaluating Sumitomo Corp. (SSUMY) and ITT (ITT) as potential undervalued stocks in the Diversified Operations sector [1] Valuation Metrics - Both SSUMY and ITT currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3] - SSUMY has a forward P/E ratio of 9.61, significantly lower than ITT's forward P/E of 26.82 [5] - The PEG ratio for SSUMY is 1.90, while ITT's PEG ratio is 2.15, suggesting SSUMY may be more favorably valued considering expected earnings growth [5] - SSUMY's P/B ratio is 1.07, compared to ITT's P/B of 5.31, further indicating that SSUMY is undervalued relative to its book value [6] - Based on these valuation metrics, SSUMY has earned a Value grade of A, while ITT has a Value grade of D [6] Investment Recommendation - Despite both companies having solid earnings outlooks, SSUMY is identified as the superior value option based on the discussed valuation figures [7]

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