ITT Corp. (NYSE: ITT) reported Q1 EPS of $0.80, $0.06 better than the analyst estimate of $0.74. Revenue for the quarter came in at $663 million versus the consensus estimate of $627.07 million.

First Quarter Results

• Revenue of $663 million Total & Organic Revenue -5%
• Segment OI Margin of 11.7%; Adj Segment OI Margin of 14.5%
• EPS of $0.95 up +19% on Favorable Asbestos Settlement; Adj EPS of $0.80 down -12%

“First, I would like to thank all of the first responders and essential employees around the world that provided us the opportunity to deliver to our customers in the essential industries that we serve. The COVID-19 pandemic has created an unprecedented challenge uniting ITTers all around the world in their focus on our top three 2020 priorities - the health of our people, the health of our business, and the health of our financials,” said ITT Chief Executive Officer and President, Luca Savi. “And our first-quarter results are a testimony to our focused priorities, the resilience of our diversified businesses, and the resilience of our dedicated people. COVID-19 disrupted our operations worldwide as we experienced decreased customer demand, temporary plant closures, and stricter health protocols to keep our employees safe. We stayed nimble, flexible, and humble, and we went to work. We worked harder than ever in more unusual circumstances than ever to create value for our customers each and every day. And in the quarter, we identified significant incremental new cost actions and liquidity measures that will best position ITT to power through this challenging period and position us nicely for the future.”

COVID-19 Response

In addition to prioritizing the health of our employees, our ITT team has been working in close collaboration with our customers and suppliers and acting decisively to realign our operations in this rapidly changing business environment. Management continues to monitor developments and has taken proactive measures to enhance our liquidity and reduced costs to better navigate this uncertain environment. Here are some of the liquidity and cost action highlights:

Liquidity:

• $1.2 billion in liquidity as of May 1, 2020;
• Fully drew down our $500 million Revolving Credit Facility as of May 1, 2020;
• Executed new 364-Day Revolving Credit Agreements totaling $200 million on April 29, 2020;
• 108% Funded status for U.S. pension plans as of March 31, 2020;
• Investment grade balance sheet;
• Executed $73 million in discretionary share repurchases during the first quarter of 2020 and then suspended further activity;
• No planned change to our current dividend strategy at this time

Cost Actions:

• Implementing a $50 million organizational-wide restructuring plan that is primarily focused on structural cost reductions with expected annualized pre-tax benefit of $70 million;
• Salary reductions for the Chief Executive Officer and all other executives, and reduced compensation for Board of Directors;
• Suspended the 401K match for certain U.S. employees;
• $35 million planned reduction in 2020 capital expenditures;
• Supply chain and vendor renegotiations;
• Significant reduction in discretionary spending

While any decision that impacts employees is always difficult, the additional actions that the company is undertaking will help us continue to serve our customers in line with changing demand. ITT entered this pandemic with a strong investment grade balance sheet and a liquidity position today of approximately $1.2 billion, which positions us well to confront the impacts of this pandemic. However, the ultimate 2020 impact of COVID-19 on our business, results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic and the extent of its impact on the global economy, which cannot be predicted at this time. As a result, we, like many of the customers we serve, are unable to forecast with certainty the effect on ITT’s financial and operational results, which could be material, and as a result, all of ITT’s previously communicated guidance for 2020 is being withdrawn.

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