ITT reaffirms 2005 growth forecast

WHITE PLAINS, N.Y. – Marine industry supplier ITT Industries, Inc. expects double-digit earnings growth in 2005, forecasting full year 2005 earnings per share between $5.00 and $5.15, the company said in a release this morning.

“We’re certainly pleased with the double digit organic revenue and earnings growth we’ve realized so far in 2004, reflecting the strength of our portfolio and the soundness of the ITT management system,” said Steve Loranger, chairman, president and CEO. “Our positive outlook is largely due to the momentum being generated by our ITT Management System, which includes our Value-Based Six Sigma and a number of other improvement tools.

“Our projected 11- to 14-percent earnings growth in 2005 includes an anticipated $0.18 – $0.26 per share headwind from pension and healthcare costs. Our ability to grow earnings in the face of these headwinds is a testament to the strength of our strong management team and our attractive portfolio of businesses.”

Loranger reaffirmed ITT’s previous full year 2004 earnings guidance at the top end of the $4.45-$4.50 range, on expected revenues of $6.65 – $6.75 billion, with cash performance consistent with prior guidance.

“We will enter 2005 with clear goals and objectives in terms of our key strategies of growth, operational excellence and leadership development. We believe we are positioned to grow revenues 6 – 12 percent to $7.2 to $7.4 billion, continue growing operating margin and cash flow, and anticipate a 2005 EPS of $5.00 – $5.15.”

ITT said new product offerings in Leisure Marine, Friction Materials and the tubing business, and gains from operational improvements are expected to continue in the Motion & Flow Control segment in 2005. The company anticipates 2005 revenues of $1.05 – $1.1 billion, representing zero to 6 percent growth over 2004 segment revenues. An improved cost position through production in low cost areas and lean manufacturing initiatives are expected to improve the segment’s operating margins from 20 to 80 basis points for 2005.

The Electronic Components segment is expected to see continued improvement resulting from recent portfolio refinement initiatives and the recovery of key end markets in the year ahead. Full year 2005 revenues are expected to grow 1 to 6 percent to $700 – $725 million, with growth from increased contribution from new products partially offset by the impact of the business’ strategy to prune non-core product lines, ITT said.

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