ITT Corp. (NYSE: ITT) reported Q2 EPS of $0.82, $0.04 better than the analyst estimate of $0.78. Revenue for the quarter came in at $697 million versus the consensus estimate of $687.03 million.

2018 Second-Quarter GAAP Results

• Record revenue up 10% to $697 million
• Orders up 18% to $742 million
• Segment operating income up 30% to $106 million
• EPS up 46% to $0.79

2018 Second-Quarter Adjusted Results

• Organic revenue up 7%
• Organic orders up 15%
• Record adjusted segment operating income up 21% to $108 million
• Record adjusted EPS up 26% to $0.82

Strategic Highlights

• 22 Motion Technologies Friction OEM wins, including 9 front axle and 4 EV/Hybrid
• Net operating productivity, execution & volume drive adjusted segment operating margins to 15.5%
• Raising full-year organic revenue and adjusted EPS guidance

“For the second consecutive quarter, ITT delivered record results and double-digit growth across a number of key metrics including revenue, adjusted segment operating income and adjusted EPS,” said CEO and President Denise Ramos. “This performance was driven by our intense focus on optimizing execution, reflected in our strong productivity gains and the year-over-year adjusted margin expansion of 130 basis points, led by improvements of 350 basis points at Industrial Process and 280 basis points at Connect and Control Technologies. Our results also reflect our ability to drive growth and market share gains in strategic global end markets. As we move into the second half of 2018, we’ll continue to focus on advancing operational excellence while building on our momentum in target markets that will propel our future growth.”

The company is raising its previously announced 2018 full-year organic revenue guidance to the new range of up 3 percent to up 5 percent primarily due to the strong year-to-date revenue and order growth. However, the company is maintaining its previously announced 2018 full-year total revenue guidance of up 5 percent to up 8 percent due to recent unfavorable foreign currency movements.

The company is raising the mid-point of its previously announced 2018 full-year adjusted EPS guidance by five cents to $3.10, which represents a 20 percent increase compared to the prior year. The updated adjusted EPS guidance range of $3.05 to $3.15 reflects improving market dynamics, volume, and additional net operating productivity, partially offset by higher commodity costs and unfavorable foreign currency. The company is raising and tightening its previously announced 2018 full-year GAAP EPS guidance to a new range of $3.32 to $3.44 reflecting operational strength and improving market conditions, as well as lower restructuring and realignment costs and tax expenses.

GUIDANCE:

ITT Corp. sees FY2018 EPS of $3.32-$3.44, versus the consensus of $3.09.

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