ITT reports softness in marine accessories

WHITE PLAINS, N.Y. – ITT Industries, Inc.’s (NYSE: ITT) Motion and Flow Control division, where its marine industry products are managed, took a hit as a result of softness in the marine accessories market following an “active” hurricane season, the company reported in a recent statement.

But ITT added that it now is seeing early signs of recovery in this sector.

Fourth quarter revenues for ITT’s Motion & Flow Control segment were $148.4 million, down 7 percent from the fourth quarter a year earlier. Full year segment revenues rose 6 percent to $670 million. Fourth quarter operating income for the segment was $23.5 million, down $6.2 million from the comparable period in 2004,

The big picture

The company as a whole, which serves a variety of industries, saw a fourth quarter 2005 net loss of $84.0 million or $0.91 per share, including the impact of special items of $218.6 million or $2.34 per share, primarily related to a previously announced non-cash asset impairment charge in the company’s switches business. Excluding special items, earnings from continuing operations grew 17 percent to $1.43 per share. Fourth quarter 2005 revenue was $1.95 billion, up 6 percent over the fourth quarter last year, according to ITT.

“The fourth quarter capped a very good year, with full year results including 17 percent revenue growth, 20 percent growth in operating earnings (excluding special items), and higher margins and cash flow,” said Steve Loranger, chairman, president and chief executive officer. “The year’s performance reflects the strength of our portfolio and attractiveness of our core businesses.”

Reported net income for 2005 was $359.5 million and full year GAAP EPS was $3.81, including the impact of special items. Excluding special items, earnings from continuing operations were $493.9 million or $5.24 per share, up 20 percent over 2004. Full year 2005 revenues were $7.4 billion, up 17 percent from the prior year.

“We expect to realize greater benefits from ongoing improvement initiatives and we see outstanding business opportunities in the year ahead,” Loranger said. “We remain confident in our full year 2006 EPS outlook of $5.78-$5.92, including the estimated ($0.18) per share impact of SFAS 123R, ‘Share-Based Payment,’ an increase of 10-13 percent over adjusted full year 2005 operating results. Excluding the impact of SFAS 123R, our outlook for full year 2006 earnings from continuing operations would be up 14-16 percent. We expect Q1 2006 EPS of $1.18-$1.22.”

All figures are calculated prior to the impact of a pending 2-for-1 stock split, scheduled to take place in February.

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