ITT (US:ITT) ZACKS·2025-06-25 15:36Core Insights - ITT Corporation is experiencing growth across its segments, particularly in the Industrial Process, Connect and Control Technologies, and Motion Technologies segments, driven by strong demand and strategic acquisitions [1][2][7]. Segment Performance - The Industrial Process (IP) segment is benefiting from solid momentum in short-cycle business within energy and industrial markets, with growth in demand for parts, services, and valves [1]. - The Connect and Control Technologies (CCT) segment is supported by increased sales of components and connectors in defense and industrial markets, bolstered by the acquisition of kSARIA [1][2]. - The Motion Technologies (MT) segment is expected to perform well due to strong demand for brake components, specialized sealing solutions, and damping technologies in OEM and rail transportation markets [1]. Acquisitions and Growth - Acquisitions contributed 6.3% to ITT's sales in Q1 2025, with significant deals including kSARIA and Svanehøj, enhancing capabilities in defense, aerospace, and marine markets [2][7]. - The acquisition of Micro-Mode Products in May 2023 expanded ITT's product portfolio and customer base, particularly for long-term defense programs [2]. Financial Performance - In Q1 2025, ITT paid out dividends of $28.7 million and repurchased shares worth $100 million, with a 10% increase in the quarterly dividend rate announced in February 2025 [3]. - ITT's sales rose 6.3% in Q1 2025, driven by strength across its segments, although higher costs and foreign exchange translation negatively impacted revenues [7][9]. Cost Challenges - The company has faced rising operating costs, with a 9.6% year-over-year increase in cost of sales in 2024 due to higher raw material and labor costs [8]. - Sales and marketing expenses rose 18.2% year-over-year in 2024, continuing into Q1 2025 with a 6.2% increase [8].