ITT Inc · Q3 2022 earnings

Briefing

ITT reported strong Q3 2022 results with revenue growth, driven by organic growth and strategic acquisitions.

ITT Inc. reported a 9% increase in revenue and a 15% increase on an organic basis. EPS was reported as $1.23 and adjusted EPS was $1.20. The company's performance was driven by growth in Industrial Process, Connect & Control Technologies, and Motion Technologies, as well as pricing recovery across all segments.

• Revenue increased by 9% year-over-year, with 15% organic growth.
• Orders grew by 7% (13% organic), driven by pump projects, connectors, and aerospace and defense components demand.
• Segment operating margin was 17.6% (18.2% adjusted), showing strong improvement.
• Earnings per share increased by 23% (21% adjusted).

Headline financials

Revenue & EPS history

ITT now expects revenue growth of 8%, and 12% on an organic basis driven by the strong year-to-date performance. The revenue guidance assumes a continued reduction in sales in Russia stemming from the war in Ukraine, which we estimate will impact revenue by approximately $85 million for the full year. Our revised guidance for segment operating margin, EPS and free cash flow reflects the impact of continued disruptions in the global supply chain and continued cost inflation which we anticipate will persist throughout 2022. As a result, we now expect segment operating margin of approximately 17.0%, and adjusted segment operating margin of approximately 17.6%, up 40 bps for the full year; free cash flow of $135 million to $165 million, representing free cash flow margin of 5% to 6% for the full year; EPS of $4.20 to $4.30, and adjusted EPS of $4.35 to $4.45, up 7% to 10% for the full year.