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ITT's Q1 Earnings & Revenues Beat Estimates, Increase Y/Y

ITT Inc. ITT reported better-than-expected first-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate.   

In the quarter, the company delivered an earnings surprise of 21.8%. Quarterly adjusted earnings were $1.06 per share, outpacing the Zacks Consensus Estimate of 87 cents. Also, the bottom line increased 33% from the year-ago quarter’s figure.

Revenues of $698.4 million were up 5.3% year over year. Also, revenues grew 1.5% on an organic basis. Also, the top line surpassed the consensus mark of $657 million by 6.3%.

Segmental Breakup

First-quarter revenues of Industrial Process were $202.3 million, down 11% year over year. Organic sales declined 12.2%, owing to lower revenues from baseline pumps and oil and gas pump projects as well as weakness across the short-cycle business.

Quarterly revenues of Motion Technologies rose 23.9% year over year to $369.1 million. Organic sales increased 17.1%, primarily driven by strength in the global automotive markets and higher Friction sales on account of improved demand.

Connect & Control Technologies generated $127.3 million revenues, down 8.2% year over year. Organic sales fell 9.7% due to softness across global commercial aerospace and defense.

Costs/Margins

Cost of sales in the first quarter was $469.4 million, up 3.4% year over year. Sales and marketing expenses were $36.7 million compared with $41.6 million in the year-ago quarter.

Gross profit rose 9.4% on a year-over-year basis to $229 million. Gross profit margin was 32.8%, up 120 basis points.

Balance Sheet/Cash Flow

Exiting the first quarter, ITT had cash and cash equivalents of $780.2 million, down from $859.8 million as of Dec 31, 2020. Commercial paper and current maturities of long-term debt were $61.2 million compared with $106.8 million at the end of 2020.

In first three months of 2020, the company generated $70.8 million in net cash from operating activities, higher than $53.5 million recorded in the prior year. Capital expenditures totaled $17.2 million, declining from $22.2 million spent in the year-ago period.

Guidance

For 2021, the company anticipates adjusted earnings of $3.80-$4.00 per share, suggesting growth of 21.9% at the mid-point from the year-ago period’s reported figure.

For the year, the company expects revenues to increase in the range of 8-10%, with organic growth of 5-7%. Also, free cash flow is anticipated to lie in the range of $300-$320 million.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are Alcoa Corporation AA, Applied Industrial Technologies, Inc. AIT and Lakeland Industries, Inc. LAKE. While Alcoa currently sports a Zacks Rank #1 (Strong Buy), Applied Industrial and Lakeland Industries carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alcoa delivered an earnings surprise of 56.78%, on average, in the trailing four quarters.

Applied Industrial delivered an earnings surprise of 30.33%, on average, in the trailing four quarters.

Lakeland Industries delivered an earnings surprise of 230.73%, on average, in the trailing four quarters.

ITT Inc. Price, Consensus and EPS Surprise

ITT Inc. price-consensus-eps-surprise-chart | ITT Inc. Quote

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ITT Inc. (ITT): Free Stock Analysis Report
 
Alcoa Corp. (AA): Free Stock Analysis Report
 
Applied Industrial Technologies, Inc. (AIT): Free Stock Analysis Report
 
Lakeland Industries, Inc. (LAKE): Free Stock Analysis Report
 
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