Core Insights - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores are designed to complement the Zacks Rank, aiding investors in selecting stocks likely to outperform the market in the short term [2] Zacks Style Scores Overview - Stocks are rated A, B, C, D, or F based on value, growth, and momentum characteristics, with higher scores indicating better performance potential [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - Concentrates on a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - Targets stocks with upward or downward trends in price or earnings, utilizing factors like one-week price change and monthly earnings estimate changes [5] VGM Score - Combines all three Style Scores to provide a comprehensive rating, highlighting stocks with attractive value, strong growth forecasts, and promising momentum [6] Zacks Rank Integration - The Zacks Rank leverages earnings estimate revisions to guide investors, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988, outperforming the S&P 500 [7] - A significant number of stocks can hold a Strong Buy or Buy rank, making the Style Scores essential for narrowing down investment choices [8] Investment Strategy - For optimal returns, investors should consider stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] - Stocks with lower ranks but high Style Scores may still present risks due to declining earnings forecasts [10] Company Spotlight: ITT Inc. - ITT Inc., based in New York City, is a leader in high-technology engineering and manufacturing, holding a Zacks Rank of 2 (Buy) and a VGM Score of B [11] - The company has seen a 1.8% increase in shares over the past four weeks, with three analysts raising earnings estimates for fiscal 2025, resulting in a Zacks Consensus Estimate of $6.45 per share [12]

Core Insights - ITT Inc. reported adjusted earnings of $1.64 per share for Q2 2025, exceeding the Zacks Consensus Estimate of $1.62, marking a 10.1% year-over-year increase driven by sales growth in the Connect & Control Technologies segment [1][9] - Total revenues reached $972 million, surpassing the consensus estimate of $947 million, with a year-over-year growth of 7.3% [2][9] Segment Performance - The Industrial Process segment generated revenues of $355.9 million, up 7.6% year-over-year, with organic sales increasing by 5.5% and adjusted operating income rising by 12.6% [3] - The Motion Technologies segment reported revenues of $365.7 million, a decrease of 4.9% year-over-year due to the Wolverine divestiture, although organic revenues increased by 3% [4] - Revenues from the Connect & Control Technologies segment were $251.9 million, reflecting a 31.3% year-over-year increase, with adjusted operating income rising by 24.9% [5] Financial Metrics - ITT's cost of revenues increased by 6.2% year-over-year to $625.6 million, while gross profit rose by 9.5% to $346.8 million [6] - Adjusted operating income increased by 9.2% year-over-year to $179.0 million, with a margin expansion of 30 basis points to 18.4% [6] Balance Sheet and Cash Flow - As of the end of Q2 2025, ITT had cash and cash equivalents of $467.9 million, up from $439.3 million at the end of Q4 2024 [7] - In the first half of 2025, ITT generated net cash of $267.1 million from operating activities, an increase from $215.5 million in the prior year, with free cash flow reaching $213.9 million [8] 2025 Outlook - ITT raised its 2025 adjusted earnings guidance to a range of $6.35-$6.55 per share, indicating an 8-11% increase from the previous year [11] - Revenue growth is projected between 5-7%, with an adjusted operating margin estimated between 18.1% and 18.7% [12]

Core Insights - ITT reported adjusted earnings per share of $1.64, exceeding the analyst forecast of $1.61, and revenue of $972.4 million, surpassing the consensus estimate of $948.47 million [1][2] - Orders exceeded $1 billion, resulting in a backlog of nearly $2 billion at the end of the quarter, indicating strong demand and growth across all major segments [1][5][8] Financial Performance - Adjusted EPS increased by 10.1% year-over-year, while revenue grew by 7.3% [2][5] - Operating margin improved to 18.0%, with company-wide operating income rising nearly 10% [2][7] - Free cash flow reached $137.3 million, a 2.1% increase from the previous year [2][9] Segment Performance - Motion Technologies reported sales of $365.7 million, a 4.9% decline, but showed organic growth of 3.0% [6] - Industrial Process generated $355.9 million in revenue, up 7.6% reported and 5.5% organically [6] - Connect & Control Technologies saw a 31.3% increase in sales to $251.9 million, with organic growth of 4.5% [6] Strategic Focus - ITT is focusing on global diversification and expanding in high-growth markets, with consistent investment in R&D [4] - Recent innovations include energy-saving industrial motor drives and targeted acquisitions to enhance exposure to aerospace and sustainability-linked markets [4] Future Outlook - Management raised full-year revenue guidance to a 5-7% increase, with adjusted EPS expected to be between $6.35 and $6.55, reflecting year-over-year growth of 8-11% [10] - Free cash flow is projected to be in the $450-500 million range, accounting for 12-13% of revenue [10] - Investors should monitor segment-level margin improvements, order trends, and the impact of tariff-related cost increases [11]

Core Insights - ITT reported revenue of $972.4 million for the quarter ended June 2025, reflecting a 7.3% increase year-over-year and surpassing the Zacks Consensus Estimate of $946.88 million by 2.7% [1] - Earnings per share (EPS) for the quarter was $1.64, up from $1.49 in the same quarter last year, with a surprise of 1.23% compared to the consensus estimate of $1.62 [1] Revenue Performance - Motion Technologies (MT) revenue was $365.7 million, exceeding the average estimate of $361.86 million, but showing a year-over-year decline of 4.9% [4] - Connect & Control Technologies (CCT) revenue reached $251.9 million, significantly above the average estimate of $236.64 million, marking a year-over-year increase of 31.3% [4] - Industrial Process (IP) revenue was reported at $355.9 million, slightly above the average estimate of $348.57 million, with a year-over-year growth of 7.6% [4] Adjusted Operating Income - Adjusted Operating Income for Corporate was reported at -$17.4 million, compared to the average estimate of -$16.66 million [4] - Adjusted Operating Income for Connect & Control Technologies (CCT) was $45.1 million, exceeding the average estimate of $44.06 million [4] - Adjusted Operating Income for Motion Technologies (MT) was $73.8 million, above the average estimate of $70.92 million [4] - Adjusted Operating Income for Industrial Process (IP) was $77.5 million, surpassing the average estimate of $75.69 million [4] Stock Performance - ITT shares have returned -0.4% over the past month, while the Zacks S&P 500 composite has increased by 2.7% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported $1 billion in orders, a 16% increase overall and a 13% increase organically, driven by strong performance across all businesses and acquisitions [7] - Quarterly revenue exceeded $970 million, up 7% overall and 4% organically, with all segments contributing [7] - Operating income grew more than twice the organic sales growth rate, and operating margin expanded over 100 basis points excluding M&A impacts [7] - Adjusted EPS grew by 10% or 16% when excluding the WorldVerlin divestiture [8] - Free cash flow reached $214 million year-to-date, with a free cash flow margin of 14% in Q2 [9] Business Line Data and Key Metrics Changes - Industrial Process (IP) orders grew by 22%, with notable strength in Gulps Pumps and Svanohoi, where orders exceeded their full year 2024 revenue in the first half of 2025 [10] - Connect and Control (CCT) saw a 9% organic growth driven by Defense and Commercial Aerospace, with total orders increasing by 36% [11] - Motion Technologies (MT) Friction team won 49 new electrified platform awards, with Friction OE growing 7% organically [12][13] - IP revenue grew 5% organically, while CCT grew 4% organically, and MT Friction OE outperformed global auto production by over 500 basis points [24][26] Market Data and Key Metrics Changes - The company reported a book-to-bill ratio of 1.1, resulting in an ending backlog of nearly $2 billion, up 34% year-over-year and 9% sequentially [13] - The automotive market production was up 2.6% in Q2, with expectations for the full year to be flat or slightly positive [42] - The company outperformed in all three regions (Europe, China, North America) and across all powertrain types (internal combustion, hybrid, EV) [43] Company Strategy and Development Direction - The company focuses on organic growth and margin expansion, complemented by M&A activities [6] - The 2030 financial targets include more than 5% organic revenue growth and approximately 10% total growth annually, with margins expected to reach 23% [22] - The company is actively pursuing acquisition targets, with a disciplined framework for deal selection and integration [21][82] Management's Comments on Operating Environment and Future Outlook - Management raised the full-year adjusted EPS outlook to $6.45, reflecting strong first-half performance and improved visibility for the second half [16][31] - The company expects continued growth in the Project business in IP, firm demand in Aerospace and Defense, and outperformance in Friction OE and Rail [31] - Management noted that the funnel remains healthy, with only minor shifts in order timing, indicating confidence in future performance [40] Other Important Information - The company repurchased $500 million of shares year-to-date, reducing the weighted average share count by 3% [9] - The estimated gross tariff costs for 2025 have been reduced to approximately $25 million, half of the previous estimate, with no material impact expected [32][122] Q&A Session Summary Question: Thoughts on capital equipment and project hesitancy - Management noted strong order performance with only minor shifts in timing, indicating no major concerns in the market [39][40] Question: Auto landscape outlook - The automotive production forecast for 2025 is slightly positive, with the company outperforming across all regions and powertrain types [42][43] Question: CCT orders and market growth - CCT orders grew significantly, driven by aerospace and defense, with strong share gains noted [52][54] Question: FX impact on Motion Technologies margins - The depreciation of the dollar against the euro has negatively impacted transaction margins, despite positive translation effects [56] Question: Strength in Svanahoy business - The outperformance is attributed to strong execution and product differentiation, with expectations for continued growth [63][65] Question: Pricing actions and tariff exposure - The company has successfully mitigated tariff impacts through pricing and productivity actions, with no material income impact expected [122]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported $1 billion in orders, a 16% increase overall and a 13% increase organically, driven by strong performance across all businesses and acquisitions [7] - Quarterly revenue exceeded $970 million, reflecting a 7% total increase and a 4% organic increase, with all segments contributing [7][22] - Operating income grew more than twice the organic sales growth rate, and operating margin expanded over 100 basis points, excluding M&A impacts [7][13] - Adjusted EPS grew by 10% year-over-year, or 16% when excluding the impact of the WorldVerlin divestiture [7][25] - Free cash flow reached $214 million year-to-date, with a free cash flow margin of 14% in Q2 [7][26] Business Line Data and Key Metrics Changes - Industrial Process (IP) orders grew by 22%, with notable strength in Gulps Pumps and Svanohoi, where orders exceeded their full year 2024 revenue in the first half of 2025 [9][12] - Connect and Control (CCT) saw a 9% organic growth driven by Defense and Commercial Aerospace, with total orders increasing by 36% [10][22] - Motion Technologies (MT) reported a 7% organic growth, outperforming global auto production by over 500 basis points [24][12] - Overall, the company achieved a book-to-bill ratio of 1.1, resulting in an ending backlog of nearly $2 billion, up 34% year-over-year [12] Market Data and Key Metrics Changes - The automotive market showed a production increase of 2.6% in Q2, with expectations for the full year to be flat or slightly positive at around 90 million vehicles produced [41] - The company outperformed in all regions, including significant gains in China, Europe, and North America [42] Company Strategy and Development Direction - The company focuses on organic growth and margin expansion, complemented by strategic M&A activities [6][15] - The long-term financial targets include over 5% organic revenue growth and approximately 10% total growth annually, with margins expected to reach 23% by 2030 [20] - The company is actively pursuing acquisition targets, particularly in the $200 million to $400 million revenue range, to enhance its market position [76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance and raised the full-year adjusted EPS outlook to $6.45, reflecting a 10% growth compared to the previous year [15][30] - The company anticipates continued growth in the Project business, firm demand in Aerospace and Defense, and outperformance in Friction OE and Rail for the second half of the year [29] - Management noted that the economic environment remains less volatile, contributing to improved visibility for the second half of 2025 [29] Other Important Information - The company repurchased $500 million of its shares year-to-date, reducing the weighted average share count by 3% [8][26] - The company expects to deliver close to $500 million in free cash flow for the year, supported by strong operating income and improved working capital management [30] Q&A Session Summary Question: Thoughts on capital equipment and project hesitancy - Management noted strong order performance with only minor shifts in timing, indicating a healthy market environment [37][39] Question: Auto landscape outlook - The company expects flat or slightly positive production for the year, with significant outperformance across all regions and powertrains [41][42] Question: CCT orders growth and market share - CCT orders grew significantly, driven by defense and aerospace, with strong share gains noted [51][52] Question: FX impact on Motion Technologies margins - The depreciation of the dollar against the euro has created transaction impacts affecting margins, but overall performance remains strong [54] Question: Performance of Svanahoy - Svanahoy is expected to grow orders by over 20% for the full year, with strong execution and product differentiation driving success [62] Question: Pricing actions and tariff exposure - The company has reduced its tariff exposure estimate for 2025 and is implementing pricing actions to mitigate impacts [115][117] Question: M&A environment and deal activity - The company sees a fragmented market with opportunities for further acquisitions, particularly in flow-related sectors [120][121]

Group 1: Earnings Performance - ITT reported quarterly earnings of $1.64 per share, exceeding the Zacks Consensus Estimate of $1.62 per share, and up from $1.49 per share a year ago [1] - The earnings surprise for the quarter was +1.23%, following a previous surprise of +0.69% with earnings of $1.45 per share against an expectation of $1.44 [2] - Over the last four quarters, ITT has consistently surpassed consensus EPS estimates [2] Group 2: Revenue Performance - ITT's revenues for the quarter ended June 2025 were $972.4 million, surpassing the Zacks Consensus Estimate by 2.70% and up from $905.9 million year-over-year [3] - The company has exceeded consensus revenue estimates three times in the last four quarters [3] Group 3: Stock Performance and Outlook - ITT shares have increased approximately 11.7% since the beginning of the year, outperforming the S&P 500's gain of 8.2% [4] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $1.65 for the coming quarter and $6.43 for the current fiscal year [5][8] - The Zacks Rank for ITT is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [7] Group 4: Industry Context - The Diversified Operations industry, to which ITT belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [9] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [9]

Financial Performance Highlights - ITT reported over $1 billion in orders for the second consecutive quarter, driven by share gains[7] - The company is raising its full-year adjusted EPS midpoint by 15 cents to $6.45, a 10% increase compared to the previous year[7] - Q2 2025 adjusted EPS grew by 10%[8] - Year-to-date free cash flow reached $214 million, a 30% increase compared to the previous year[9] Growth Metrics - Organic orders grew by 13% in Q2 2025, while total orders grew by 16%[8] - Organic revenue growth was 4%, with total revenue growth at 7%[8] - IP organic growth was 22%, with pump projects showing a 62% increase[9] - CCT organic growth was 9%, driven by defense and aerospace awards[9] Margin and Profitability - The adjusted operating margin was 18.4%, representing a 30 bps expansion[8] - IP adjusted operating margin was 21.8%, a 100 bps increase[9] - MT adjusted operating margin was 20.2%, a 140 bps increase[9] - CCT adjusted operating margin increased by 270 bps excluding acquisition dilution[9] Capital Deployment - ITT repurchased $500 million of its own shares year-to-date, reducing the share count by 3%[9] - The company expects to generate $0.5 billion of full-year free cash flow[9] Guidance and Targets - The company is raising its 2025 revenue growth guidance to +5% to +7%, with organic growth expected to be +3% to +5%[24] - ITT is targeting revenue growth of >5% CAGR for its base business and ~10% CAGR with compounding M&A by 2030[11] - The company is aiming for an adjusted EPS of >$11 for the base business and >$12 with M&A by 2030[11]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) ITT reported strong Q2 2025 results, with revenue up 7% to $972 million and adjusted EPS up 10%, prompting raised full-year guidance Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue ($M) | $972.4 | $905.9 | +7.3% | | Organic Growth (%) | 4.3 | - | - | | Operating Income ($M) | $175.1 | $159.7 | +9.6% | | Adjusted Operating Income ($M) | $179.0 | $163.9 | +9.2% | | Adjusted Operating Margin (%) | 18.4 | 18.1 | +30 bps | | EPS ($) | $1.52 | $1.45 | +4.8% | | Adjusted EPS ($) | $1.64 | $1.49 | +10.1% | | Net Cash from Operating Activities ($M) | $153.7 | $157.7 | -2.5% | | Free Cash Flow ($M) | $137.3 | $134.5 | +2.1% | - Orders grew **16%** (**13% organic**), surpassing **$1.0 billion** for the second consecutive quarter, driven by pump projects, aerospace and defense awards, and rail[6](index=6&type=chunk) - Revenue growth was driven by pump project shipments in Industrial Process (IP), aerospace and industrial connectors demand in Connect & Control Technologies (CCT), and market share gains in automotive and rail in Motion Technologies (MT)[2](index=2&type=chunk) - Year-to-date free cash flow reached **$214 million**, a **30% increase** compared to the prior year[5](index=5&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Luca Savi highlighted strong Q2 performance driven by execution, innovation, and M&A, leading to increased 2025 revenue and EPS guidance - The company entered Q3 with a backlog of **nearly $2 billion**[8](index=8&type=chunk) - **Over half a billion dollars** of capital was deployed, which is **nearly three times** the company's free cash flow[8](index=8&type=chunk) - Acquisitions are performing well, securing large awards and showing strong profitable growth in the energy transition and defense sectors[8](index=8&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) All segments contributed to Q2 2025 organic revenue growth, with Industrial Process showing strong gains and Connect & Control Technologies boosted by acquisition Q2 2025 Segment Performance Overview | Segment | Revenue ($M) | Reported Change (%) | Organic Growth (%) | Operating Income ($M) | Adjusted Change (%) | Adjusted Margin (%) | Adjusted Margin Change (bps) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Motion Technologies | $365.7 | (4.9) | 3.0 | $71.2 | +1.9 | 19.5 | +140 | | Industrial Process | $355.9 | 7.6 | 5.5 | $76.6 | +12.6 | 21.5 | +100 | | Connect & Control Tech | $251.9 | 31.3 | 4.5 | $44.9 | +24.9 | 17.8 | (90) | [Motion Technologies (MT)](index=2&type=section&id=Motion%20Technologies) Motion Technologies reported a 4.9% revenue decrease due to divestiture, but achieved 3.0% organic growth and a 100 basis point margin improvement - Organic revenue increased by **$10 million** due to strength in Friction OE and KONI rail demand[9](index=9&type=chunk) - The divestiture of Wolverine was the primary reason for the decrease in reported revenue and offset gains from productivity and volume in operating income[9](index=9&type=chunk) [Industrial Process (IP)](index=3&type=section&id=Industrial%20Process) Industrial Process revenue grew 7.6% to $355.9 million with 5.5% organic growth, and operating income increased 15.2% with significant margin expansion - Revenue increased by **$25 million**, driven by strength in pump projects and pricing[10](index=10&type=chunk) - Operating income rose by **$10 million**, with margin expansion driven by pricing, productivity, and volume[10](index=10&type=chunk) [Connect & Control Technologies (CCT)](index=3&type=section&id=Connect%20%26%20Control%20Technologies) Connect & Control Technologies revenue surged 31.3% to $251.9 million, driven by the kSARIA acquisition and 4.5% organic growth, despite a 70 basis point margin decrease - The kSARIA acquisition, which closed in September 2024, was the main driver of the **$60 million** revenue increase[11](index=11&type=chunk) - Operating margin declined due to temporary acquisition amortization, higher labor and material costs, and strategic investments[11](index=11&type=chunk) [Shareholder Returns](index=3&type=section&id=Shareholder%20Returns) ITT's Board of Directors approved a quarterly cash dividend for Q3 2025, demonstrating continued commitment to shareholder capital returns - A quarterly dividend of **$0.351 per share** was announced[12](index=12&type=chunk) - The dividend is payable on September 29, 2025, to shareholders of record as of September 2, 2025[12](index=12&type=chunk) [2025 Full-Year Guidance](index=3&type=section&id=2025%20Full-Year%20Guidance) ITT raised its full-year 2025 guidance for total revenue and EPS, now expecting higher revenue growth and an 8% to 11% increase in adjusted EPS Updated Full-Year 2025 Guidance | Metric | Previous Guidance | Updated Guidance | | :--- | :--- | :--- | | Total Revenue Growth (%) | Not specified | 5 to 7 | | Organic Revenue Growth (%) | 3 to 5 | 3 to 5 (unchanged) | | Adjusted Operating Margin (%) | Not specified | 18.1 to 18.7 | | EPS ($) | Not specified | $5.95 to $6.15 | | Adjusted EPS ($) | Not specified | $6.35 to $6.55 (8% to 11% growth) | | Free Cash Flow ($M) | $450 to $500 | $450 to $500 (unchanged) | [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q2 and the first six months of 2025, prepared in accordance with U.S. GAAP [Consolidated Condensed Statements of Operations](index=8&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) Q2 2025 revenue was $972.4 million, up from $905.9 million in Q2 2024, with net income attributable to ITT Inc. at $121.0 million or $1.52 diluted EPS Q2 2025 vs Q2 2024 Statement of Operations Highlights | Account | Q2 2025 ($M) | Q2 2024 ($M) | | :--- | :--- | :--- | | Revenue | $972.4 | $905.9 | | Gross Profit | $346.8 | $316.8 | | Operating Income | $175.1 | $159.7 | | Net Income attributable to ITT Inc. | $121.0 | $119.7 | | Diluted EPS ($) | $1.52 | $1.45 | [Consolidated Condensed Balance Sheets](index=9&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) As of June 28, 2025, ITT's total assets increased to $5.02 billion from $4.73 billion, driven by receivables and inventories, with total liabilities rising to $2.45 billion Balance Sheet Highlights | Account | June 28, 2025 ($M) | Dec 31, 2024 ($M) | | :--- | :--- | :--- | | Total Current Assets | $2,060.5 | $1,885.8 | | Total Assets | $5,015.2 | $4,731.3 | | Total Current Liabilities | $1,421.8 | $1,333.2 | | Total Liabilities | $2,451.6 | $1,945.5 | | Total Shareholders' Equity | $2,563.6 | $2,785.8 | [Consolidated Condensed Statements of Cash Flows](index=10&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) For the six months ended June 28, 2025, net cash from operating activities was $267.1 million, with $57.0 million used in investing and a $208.6 million financing outflow Six Months Ended Cash Flow Highlights | Activity | June 28, 2025 ($M) | June 29, 2024 ($M) | | :--- | :--- | :--- | | Net Cash – Operating Activities | $267.1 | $215.5 | | Net Cash – Investing Activities | $(57.0) | $(460.6) | | Net Cash – Financing Activities | $(208.6) | $213.8 | | Net change in cash | $28.9 | $(48.6) | [Non-GAAP Financial Measures and Reconciliations](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section defines key non-GAAP measures such as organic revenue, adjusted operating income, and free cash flow, providing reconciliations to U.S. GAAP for operational insight [Definitions of Non-GAAP Measures](index=11&type=section&id=Definitions%20of%20Non-GAAP%20Measures) Management utilizes non-GAAP measures including Organic Revenue/Orders, Adjusted Operating Income, Adjusted EPS, and Free Cash Flow to evaluate performance and identify underlying business trends - Organic Revenues and Orders exclude the impacts of foreign currency, acquisitions, and divestitures to help identify underlying trends[28](index=28&type=chunk) - Adjusted Operating Income and Adjusted EPS exclude special items like restructuring and certain acquisition-related costs to better reflect ongoing profitability[29](index=29&type=chunk)[30](index=30&type=chunk) - Free Cash Flow is defined as net cash from operating activities less capital expenditures and is a primary metric used by management to monitor cash generation[31](index=31&type=chunk) [Reconciliation of Revenue and Orders](index=12&type=section&id=Reconciliation%20of%20Revenue%20and%20Orders) Q2 2025 reported revenue growth was 7.3% (4.3% organic), and reported orders grew 15.6% (12.5% organic), with Industrial Process showing strong 22.2% organic order growth Q2 2025 Organic vs. Reported Growth | Metric | Reported Growth (%) | Organic Growth (%) | | :--- | :--- | :--- | | Total Revenue | 7.3 | 4.3 | | Total Orders | 15.6 | 12.5 | [Reconciliation of Operating Income and Margin](index=13&type=section&id=Reconciliation%20of%20Operating%20Income%20and%20Margin) ITT's reported Q2 operating income was $175.1 million, adjusted to $179.0 million after special items, resulting in an 18.4% adjusted operating margin, a 30 basis point improvement Q2 2025 Operating Income Reconciliation | Metric | Amount ($M) | | :--- | :--- | | Reported Operating Income | $175.1 | | Special Item Adjustments | $3.9 | | Adjusted Operating Income | $179.0 | [Reconciliation of EPS](index=14&type=section&id=Reconciliation%20of%20EPS) Q2 2025 reported diluted EPS was $1.52, adjusted to $1.64 (10.1% increase), with full-year GAAP EPS guidance of $5.95-$6.15 reconciling to adjusted EPS of $6.35-$6.55 Q2 2025 EPS Reconciliation | Metric | Per Share Amount ($) | | :--- | :--- | | Reported Diluted EPS | $1.52 | | Special Items Adjustments | $0.12 | | Adjusted Diluted EPS | $1.64 | [Reconciliation of Free Cash Flow](index=16&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Q2 2025 free cash flow was $137.3 million, with year-to-date free cash flow at $213.9 million, and full-year guidance remaining $450-$500 million Free Cash Flow Reconciliation | Period | Net Cash - Operating Activities ($M) | Capital Expenditures ($M) | Free Cash Flow ($M) | | :--- | :--- | :--- | :--- | | Q2 2025 | $153.7 | $(16.4) | $137.3 | | Six Months 2025 | $267.1 | $(53.2) | $213.9 | | FY 2025 Guidance | $575.0 - $625.0 | $(125.0) | $450.0 - $500.0 | [Safe Harbor Statement](index=6&type=section&id=Safe%20Harbor%20Statement) This section provides a legal disclaimer for forward-looking statements, cautioning investors that future performance is subject to various risks and uncertainties detailed in SEC filings - The report contains forward-looking statements based on current expectations and beliefs, which are inherently uncertain and subject to change[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Key risks that could affect future results include uncertain economic conditions, geopolitical tensions, inflation, trade disputes, supply chain volatility, and cybersecurity breaches[21](index=21&type=chunk) - The company directs investors to its Annual Report on Form 10-K for a more complete discussion of risk factors[20](index=20&type=chunk)

Company Overview - ITT is expected to report quarterly earnings of $1.62 per share, reflecting a year-over-year increase of +8.7% [3] - Revenues are anticipated to reach $946.88 million, which is a 4.5% increase from the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for July 31, and positive results could lead to a stock price increase, while negative results may cause a decline [2] - The consensus EPS estimate has been revised 1.64% higher in the last 30 days, indicating a more optimistic outlook from analysts [4] Earnings Surprise Potential - ITT has an Earnings ESP of +0.51%, suggesting a likelihood of beating the consensus EPS estimate [12] - The company holds a Zacks Rank of 2, which further supports the expectation of an earnings beat [12] Historical Performance - In the last reported quarter, ITT exceeded the expected earnings of $1.44 per share by delivering $1.45, resulting in a surprise of +0.69% [13] - Over the past four quarters, ITT has consistently beaten consensus EPS estimates [14] Industry Context - Markel Group, a peer in the Zacks Diversified Operations industry, is expected to report earnings of $24.74 per share, indicating a year-over-year decline of -4.7% [18] - Markel Group's revenues are projected to be $3.99 billion, up 4.2% from the previous year [18] - Markel Group has an Earnings ESP of -0.76% and a Zacks Rank of 3, making it challenging to predict an earnings beat [19]