ITT Inc.’s ITT fourth-quarter 2024 adjusted earnings of $1.50 per share surpassed the Zacks Consensus Estimate of $1.47. The bottom line jumped 11.9% year over year, aided by an increase in sales across most of its segments.
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Total revenues of $929.0 million beat the consensus estimate of $927 million. The top line increased 12% year over year. Organic sales rose 6% year over year, buoyed by short-cycle demand in the Industrial Process segment and industrial connectors growth in the Connect & Control Technologies segment.
For 2024, ITT reported net revenues of $3.6 billion, which increased 10.6% year over year. The company’s adjusted earnings were $5.86 per share, up 12.5% year over year.
ITT’s Segmental Results
Revenues from the Industrial Process segment totaled $326.0 million, up 25% year over year. Strength in pump projects, solid demand for aftermarket parts and services and the buyout of Svanehøj drove the segment’s performance. Organic sales increased 10.4% and adjusted operating income grew 28.3% on a year-over-year basis. Our estimate for segmental revenues was pinned at $344.0 million.
Revenues from the Motion Technologies segment amounted to $326 million, implying a year-over-year decrease of 11%. The lower sales were attributable to the divestiture of the Wolverine unit in July 2024. Higher sales volume in friction original equipment and rail demand in the KONI business aided the segmental performance. Organic revenues were flat year over year. Adjusted operating income increased 1%. Our estimate for segmental revenues was pinned at $387.0 million.
Revenues from the Connect & Control Technologies segment of $241.0 million rose 37.2% year over year on a reported basis and 9.4% organically. Our estimate was $195.9 million. The results were driven by favorable pricing actions and growth in defense and industrial connectors. Adjusted operating income increased 26% year over year.
ITT Inc. Price, Consensus and EPS Surprise
ITT Inc. price-consensus-eps-surprise-chart | ITT Inc. Quote
ITT’s Margin Profile
ITT’s cost of revenues increased 12.8% year over year to $612.6 million. The gross profit jumped 10.6% to $316.4 million.
General and administrative expenses declined 11.3% year over year to $73.9 million. Sales and marketing expenses rose 27.3% to $54.5 million. Research and development expenses increased 9.8% year over year to $28.0 million.
Adjusted operating income climbed 15.5% year over year to $162.8 million. The margin expanded 50 basis points to 17.5%.
ITT’s Balance Sheet and Cash Flow
Exiting the fourth quarter, ITT had cash and cash equivalents of $439.3 million compared with $489.2 million at the end of fourth-quarter 2023. The company’s short-term borrowings were $427.6 million compared with $187.7 million at the end of December 2023.
In 2024, ITT generated net cash of $562.6 million from operating activities compared with $538.0 million in the year-ago period. Capital expenditure totaled $123.9 million in the same period, up 15.2% year over year. Free cash flow was $438.7 million compared with $430.4 million in the prior-year period.
During 2024, ITT paid out dividends of $104.7 million, up 9.3% year over year. It repurchased shares worth $104.5 million compared with $60 million in the year-ago period.
ITT’s Dividend Hike
The company announced that its board of directors approved a 10% hike in the quarterly dividend rate, which now stands at 35.1 cents per share. It will pay out the revised amount on March 31, 2025, to shareholders on record as of March 6, 2025.
ITT's 2025 Outlook
ITT has issued its financial outlook for 2025. The company expects adjusted earnings to be in the range of $6.10-$6.50 per share. The guided range indicates an increase of 4-11% from the prior-year reported actual.
Management projects revenue growth to be in the band of 2-4% (3-5% organically). Adjusted operating margin is estimated to be between 18.1% and 19.0%. Free cash flow is predicted to be in the band of $450-$500 million. This indicates a free cash flow margin of 12-13%.
ITT’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Industrial Companies
Tetra Tech, Inc. TTEK reported earnings of $0.35 per share in the first quarter of fiscal 2025 (ended December 2024), which beat the Zacks Consensus Estimate of $0.34. This compares with earnings of $0.28 per share a year ago.
Tetra posted revenues of $1.2 billion for the quarter ended December 2024, surpassing the consensus estimate by 8.85%. This compares with year-ago revenues of $1.02 billion. The company topped the consensus estimate for revenues in each of the last four quarters.
Waste Management, Inc. WM reported earnings of $1.70 per share in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $1.79. This compares with earnings of $1.74 per share a year ago.
WM reported revenues of $5.89 billion for the quarter ended December 2024, surpassing the consensus estimate by 0.18%. This compares with year-ago revenues of $5.22 billion. The company topped the consensus estimate for revenues two times in the last four quarters.
Packaging Corporation of America PKG reported adjusted earnings per share of $2.47 in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $2.51 by a margin of 2%. The bottom line matched PKG’s guidance and grew 16% year over year.
Sales in the fourth quarter rose 10.7% year over year to $2.15 billion due to higher volumes and price/mix in both segments. The top line beat the consensus estimate of $2.13 billion.
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