Core Insights - ITT Inc. reported fourth-quarter 2024 adjusted earnings of $1.50 per share, exceeding the Zacks Consensus Estimate of $1.47, marking an 11.9% year-over-year increase driven by sales growth across most segments [1][2] - Total revenues for the quarter reached $929.0 million, surpassing the consensus estimate of $927 million, and reflecting a 12% year-over-year increase [2] Financial Performance - For the full year 2024, ITT's net revenues were $3.6 billion, a 10.6% increase year over year, with adjusted earnings of $5.86 per share, up 12.5% [3] - The Industrial Process segment generated revenues of $326.0 million, a 25% year-over-year increase, supported by strong pump projects and aftermarket demand [4] - The Motion Technologies segment reported revenues of $326 million, an 11% decrease year over year, primarily due to the divestiture of the Wolverine unit [5] - The Connect & Control Technologies segment saw revenues of $241.0 million, a 37.2% year-over-year increase, driven by favorable pricing and growth in defense and industrial connectors [6] Margin and Cost Analysis - ITT's cost of revenues increased by 12.8% year over year to $612.6 million, while gross profit rose 10.6% to $316.4 million [7] - Adjusted operating income climbed 15.5% year over year to $162.8 million, with a margin expansion of 50 basis points to 17.5% [7] Cash Flow and Capital Management - At the end of the fourth quarter, ITT had cash and cash equivalents of $439.3 million, down from $489.2 million a year earlier, with short-term borrowings increasing to $427.6 million [8] - In 2024, ITT generated net cash from operating activities of $562.6 million, up from $538.0 million in the previous year, with free cash flow at $438.7 million [9] Dividend and Future Outlook - The board of directors approved a 10% increase in the quarterly dividend rate to 35.1 cents per share, payable on March 31, 2025 [10] - For 2025, ITT expects adjusted earnings in the range of $6.10-$6.50 per share, indicating a 4-11% increase from the prior year, with revenue growth projected at 2-4% [11]

Financial Data and Key Metrics Changes - Orders grew by 10% or 5% organically, resulting in an ending backlog of $1.6 billion, up 34% year over year [6][44] - Revenue increased by 11% or 7% organically, with a strong performance across all businesses [6][44] - Operating margin expanded by 80 basis points to almost 18% [6][44] - Free cash flow generated was nearly $440 million, with EPS growth of 12% following over 17% growth in 2023 [7][45] Business Line Data and Key Metrics Changes - Connect and Control Technologies (CCT) grew 9% organically, driven by defense, industrial connectors, and aerospace [10][47] - Industrial Process (IP) grew 8% organically, with high teens growth in pump projects [10][47] - Motion Technologies (MT) grew 5% organically, with friction outperforming global automotive production by 730 basis points [10][47] Market Data and Key Metrics Changes - IP projects grew 19% organically after a 31% increase in 2023 [18] - CCT's growth was supported by strong defense and industrial connected delivery, both exceeding 40% in the quarter [18] - Friction in MT outperformed global automotive production by 410 basis points [19] Company Strategy and Development Direction - The company is transforming its portfolio through the divestiture of Wolverine and acquisitions of Vanooy and Qesaria [5][43] - The M&A strategy is expected to continue driving growth, with Vanooy orders growing 26% for the full year [12][49] - The company plans to invest in strategic areas such as geopolymer brake pads and high-performance brake pads [60][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive organic growth and margin expansion, indicating a robust backlog for 2025 [25][62] - The company anticipates revenue growth of over $3.7 billion in 2025, with organic growth of 3% to 5% [26][63] - Management noted that the first quarter of 2025 is expected to be soft, with a recovery anticipated in the second half of the year [81][84] Other Important Information - The company returned more than $200 million to shareholders in 2024 [12][50] - The M&A pipeline remains active, with ongoing cultivation of relationships for future acquisitions [119] - The company is preparing for potential tariff impacts and is developing action plans to mitigate risks [141] Q&A Session Summary Question: Guidance for 2025 and Q1 impacts - Management indicated that Q1 is expected to be soft, with EPS roughly flat to 2024 due to the Wolverine divestiture and organic revenue declines of 1% to 2% driven by MT [81][82] Question: Price renegotiations in CCT - Management confirmed that price is a significant lever in CCT, with ongoing renegotiations showing positive signs for 2025 [87][88] Question: Order patterns in IP - Orders grew 12% in Q4, with projects up 25% and short cycle up 8%, indicating strong backlog and order patterns [95][96] Question: Temporary intangible amortization - Management clarified that the temporary intangible amortization will remain similar in 2025, impacting earnings growth [107][108] Question: Motion Technologies guidance - Management expects low single-digit growth in Motion Technologies, with friction projected to outperform the market by approximately 400 basis points [122][124]

Group 1 - ITT reported revenue of $929 million for the quarter ended December 2024, reflecting a 12.1% increase year-over-year and a surprise of +0.23% over the Zacks Consensus Estimate of $926.84 million [1] - Earnings per share (EPS) for the quarter was $1.50, compared to $1.34 in the same quarter last year, resulting in an EPS surprise of +2.04% against the consensus estimate of $1.47 [1] - ITT's stock has returned +4.6% over the past month, outperforming the Zacks S&P 500 composite's +2.1% change, and currently holds a Zacks Rank 3 (Hold) [3] Group 2 - Motion Technologies (MT) revenue was reported at $326 million, which is -10.6% year-over-year and below the average estimate of $353.21 million [4] - Connect & Control Technologies (CCT) revenue reached $241 million, exceeding the average estimate of $222.69 million, marking a +37.2% year-over-year increase [4] - Industrial Process (IP) revenue was $362.60 million, surpassing the average estimate of $353.10 million, with a +25.2% change compared to the previous year [4] Group 3 - Adjusted Operating Income for Corporate was reported at -$19.70 million, worse than the average estimate of -$14.22 million [4] - Adjusted Operating Income for Connect & Control Technologies (CCT) was $42.10 million, exceeding the average estimate of $38.53 million [4] - Adjusted Operating Income for Motion Technologies (MT) was $62.90 million, below the average estimate of $66.44 million, while Industrial Process (IP) reported $77.50 million, above the average estimate of $72.21 million [4]

ITT (ITT) Q4 2024 Earnings Call February 06, 2025 09:30 AM ET Company Participants Mark Macaluso - Vice President of Investor Relations & Global CommunicationsLuca Savi - CEO and PresidentEmmanuel Caprais - Senior VP & CFOMichael Halloran - Associate Director of ResearchJeffrey Hammond - Managing DirectorScott Davis - CEO & ChairmanDamian Karas - Executive DirectorNathan Jones - Managing DirectorJoseph Giordano - Managing DirectorBrad Hewitt - VP - Equity Research Conference Call Participants Joseph Ritchie ...

Group 1: Earnings Performance - ITT reported quarterly earnings of $1.50 per share, exceeding the Zacks Consensus Estimate of $1.47 per share, and up from $1.34 per share a year ago, representing an earnings surprise of 2.04% [1] - The company posted revenues of $929 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.23%, compared to year-ago revenues of $829.1 million [2] - Over the last four quarters, ITT has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - ITT shares have increased approximately 4.7% since the beginning of the year, outperforming the S&P 500's gain of 3.1% [3] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the coming quarter is $1.48 on revenues of $953.52 million, and for the current fiscal year, it is $6.48 on revenues of $3.82 billion [7] Group 3: Industry Context - The Zacks Industry Rank indicates that the Diversified Operations sector is currently in the bottom 36% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

Financial Performance - ITT reported Q4 2024 EPS of $1.55, a 38% increase year-over-year, and full year EPS of $6.30, up 26.8% from the previous year[1][4][15]. - Q4 2024 revenue reached $929 million, reflecting a 12% year-over-year increase, with organic growth of 6% driven by higher volume and pricing actions[2][6][15]. - Operating income for Q4 2024 was $160 million, a 35% increase compared to the prior year, resulting in an operating margin of 17.2%, up 290 basis points[3][6][15]. - Full year revenue for 2024 was $3.63 billion, a 10.6% increase, with an organic growth rate of 6.9%[15]. - Gross profit for the year ended December 31, 2024, was $1,247.3 million, up 12.7% from $1,107.3 million in 2023[26]. - Operating income for the twelve months ended December 31, 2024, increased to $676.0 million, representing a 28.0% rise from $528.2 million in 2023[26]. - Net income attributable to ITT Inc. for the year was $518.3 million, a 26.3% increase compared to $410.5 million in 2023[26]. - Total Revenue for Q4 2024 is $326.0 million, with a full year total of $3,630.7 million, showing a reported revenue growth of 10.6%[36]. - Organic Revenue for 2024 is $836.6 million, with a year-over-year growth of 6.9%[36]. - Total Orders for Q4 2024 amount to $914.8 million, with a full year total of $3,785.7 million, reflecting an overall growth of 9.7%[37]. - The company experienced a reported revenue decline of 10.6% in the MT segment, while the IP segment grew by 25.2%[36]. - The CCT segment reported a revenue growth of 37.2%, contributing significantly to the overall performance[36]. Cash Flow and Capital Management - Operating cash flow for Q4 2024 was $223 million, a 31% increase year-over-year, with a free cash flow of $187 million, up 42%[5][6]. - The company deployed $1.2 billion in capital, more than double the full year free cash flow, focusing on high growth and high margin segments[5][9]. - The company generated $562.6 million in net cash from operating activities for the year, compared to $538.0 million in 2023[29]. - Free Cash Flow for the year is defined as net cash from operating activities minus capital expenditures, providing insight into cash flow management[34]. - Free cash flow for FY 2024 is projected at $438.7 million, with a free cash flow margin of 12.1%[54]. - The company reported a net cash from operating activities of $223.2 million for Q4 2024, up from $170.4 million in Q4 2023[54]. Guidance and Future Outlook - ITT initiated 2025 EPS guidance of $6.05 to $6.45, with adjusted EPS guidance of $6.10 to $6.50[5][17]. - The company expects 2025 revenue growth of 2% to 4%, with an operating margin of 18.0% to 18.9%[17]. - The company anticipates capital expenditures of $125 million for FY 2025[54]. - Full year 2025 guidance for EPS from continuing operations (GAAP) is projected between $6.05 and $6.45, with adjusted EPS expected between $6.10 and $6.50[49]. Dividends and Shareholder Returns - The company announced a 10% increase in its quarterly dividend to $0.351 per share, continuing a trend of annual dividend growth[16]. Assets and Liabilities - Cash and cash equivalents at the end of 2024 were $440.0 million, down from $489.9 million at the end of 2023[29]. - Total assets increased to $4,710.7 million in 2024, compared to $3,932.6 million in 2023, reflecting a growth of 19.7%[28]. - Total liabilities rose to $1,941.1 million in 2024, up from $1,393.5 million in 2023, marking a 39.4% increase[28]. Research and Development - Research and development expenses for the year were $116.3 million, an increase from $102.6 million in 2023[26]. Special Items and Adjustments - The impact of special item adjustments on Operating Margin for Full Year 2024 was -310 basis points[39]. - Adjusted Operating Margin for Full Year 2024 was 18.6%, reflecting a change of 590 basis points from the previous year[39]. - Q4 2024 tax benefits include valuation allowance impacts of ($8.9 million) and undistributed foreign earnings of $7.6 million, with total tax expenses for the full year 2024 amounting to $12.5 million[47]. Strategic Initiatives - The company plans to focus on market expansion and new product development to drive future growth[36]. - Strategic acquisitions and divestitures are being evaluated to enhance operational efficiency and market presence[37]. - The company experienced a divestiture of Wolverine in Q3 2024 and Matrix in Q4 2023, impacting financial results[46].

Group 1 - ITT is expected to report quarterly earnings of $1.47 per share, reflecting a year-over-year increase of 9.7% [1] - Revenues are projected to be $926.84 million, which represents an 11.8% increase from the same quarter last year [1] - There has been a 1% upward revision in the consensus EPS estimate over the past 30 days, indicating analysts have reappraised their projections [1] Group 2 - The consensus estimate for 'Revenue- Motion Technologies (MT)' is $353.21 million, indicating a year-over-year decrease of 3.2% [3] - 'Revenue- Connect & Control Technologies (CCT)' is estimated at $222.69 million, showing a year-over-year increase of 26.8% [4] - 'Revenue- Industrial Process (IP)' is projected to be $353.10 million, reflecting a year-over-year increase of 21.9% [4] Group 3 - 'Adjusted Operating Income- Connect & Control Technologies (CCT)' is forecasted to reach $38.53 million, up from $33.40 million in the same quarter last year [5] - 'Adjusted Operating Income- Motion Technologies (MT)' is expected to be $66.44 million, compared to $62.30 million in the previous year [5] - 'Adjusted Operating Income- Industrial Process (IP)' is estimated at $72.21 million, an increase from $60.40 million a year ago [6] Group 4 - Over the past month, ITT shares have returned +3.7%, outperforming the Zacks S&P 500 composite's +1.7% change [6] - ITT currently holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [6]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for ITT, with a focus on how actual results compare to estimates, which could significantly impact stock price [1][2]. Earnings Expectations - ITT is expected to report quarterly earnings of $1.46 per share, reflecting a +9% change year-over-year, with revenues projected at $927.16 million, an increase of 11.8% from the previous year [3]. - The consensus EPS estimate has been revised 0.68% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for ITT is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.80%, indicating a bullish outlook [10]. - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3, which increases the likelihood of a positive surprise to nearly 70% [8]. Historical Performance - In the last reported quarter, ITT exceeded the expected earnings of $1.43 per share by delivering $1.46, resulting in a surprise of +2.10% [12]. - Over the past four quarters, ITT has beaten consensus EPS estimates three times, showcasing a consistent ability to exceed expectations [13]. Conclusion - ITT is positioned as a compelling candidate for an earnings beat, but investors should consider other influencing factors beyond earnings results when making investment decisions [16].

Group 1: Company Performance and Segments - ITT Inc. is experiencing growth across its segments, particularly in the Industrial Process (IP) segment due to strong performance in pump projects and Habonim valves business [1] - The Connect and Control Technologies (CCT) segment is benefiting from increased sales in aerospace and defense markets, supported by acquisitions of kSARIA and Micro-Mode [2] - The Motion Technologies (MT) segment is seeing strong demand for brake components and specialized sealing solutions, which is expected to enhance its performance in the upcoming quarters [2] Group 2: Acquisitions and Expansion - ITT has focused on acquisitions for business expansion, including the acquisition of kSARIA Parent, Inc. in September 2024, which strengthened its connectivity solutions for defense and aerospace [3] - The acquisition of Svanehøj Group A/S for approximately $395 million in January 2024 expanded ITT's offerings in the marine pumps market [3] - The acquisition of Micro-Mode Products, Inc. in May 2023 enhanced ITT's product portfolio and customer base, particularly for long-term defense programs [3] Group 3: Financial Performance and Shareholder Policies - In the first nine months of 2024, ITT paid out dividends of $78.7 million, a 9.5% increase year over year, and repurchased shares worth $104 million, up 73% year over year [4] - The company's total dividend payments in 2023 were $95.8 million, with share repurchases amounting to $60 million [4] - A quarterly dividend rate increase of 10% was announced in February 2024 [4] Group 4: Market Position and Stock Performance - ITT's shares have gained 25% over the past year, significantly outperforming the industry, which saw a decline of 4.4% [5]

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? ITT (ITT) , which belongs to the Zacks Diversified Operations industry, could be a great candidate to consider.When looking at the last two reports, this supplier of parts and services to a wide variety of industries has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 2.08%, on average, in the last two qua ...