ITT Industries Reports Q1 2001 EPS Up 14 Percent to $0.65

-- Operating Margin Up 90 Basis Points on Productivity Gains,

Improved Mix

-- Free Cash Flow Increases By $57 Million to 85% of Net Income

-- Company Reiterates Double-Digit EPS Growth Outlook For Full Year 2001





Apr 24, 2001, 01:00 ET from ITT Industries, Inc.

    WHITE PLAINS, N.Y., April 24 /PRNewswire Interactive News Release/ --
 ITT Industries, Inc. (NYSE:   ITT) today announced first quarter 2001 net income
 of $59.1 million and diluted earnings per share (EPS) of $0.65, up 15 percent
 and 14 percent respectively over the first quarter 2000.  First quarter 2001
 revenues declined 2 percent to $1.19 billion from $1.2 billion in the period
 last year.  Excluding the impact of foreign currency translation, revenues
 were flat, as higher Connectors & Switches revenues offset an anticipated
 decline in the Defense segment.  First quarter operating income rose $11.4
 million or 11 percent to $111.4 million.
     The company's strong performance was attributable to its early and
 aggressive actions to address the U.S. economic slowdown, its substantial
 revenues from outside the United States, and its significant participation in
 relatively stable and predictable markets.
     "I'm especially pleased with our strong first quarter," said Lou Giuliano,
 Chairman, President and Chief Executive Officer of ITT Industries.  "Our
 management team has done an excellent job responding to challenging economic
 conditions.  Our results reflect cost-control moves we began when we first saw
 the U.S. economy was softening, and on-going improvements in our processes.
 The performance is also a testimony to the strengths of our global multi-
 industry portfolio, which is a real asset in times like these."
     "We benefit from the portfolio changes we have made over the last three
 years, shifting our business mix to less cyclical and more attractive
 markets," Giuliano added.  "Geographically, 40 percent of ITT's revenues come
 from outside the U.S.  And 60 percent of ITT's revenues come from relatively
 stable markets such as the U.S. Defense business and municipal water and
 wastewater treatment markets."
     "In addition to our earnings gain, we are also pleased with our $57
 million increase in free cash flow in the first quarter, and feel that this
 underscores the quality of our earnings," Giuliano said. "In the first
 quarter, our free cash flow of $51 million was 85 percent of net income,
 reflecting our emphasis on working capital performance and overall asset
 productivity."
     ITT Industries defines free cash flow as cash from operations minus
 capital expenditures.
 
     Second Quarter and Full Year Outlook
     Giuliano said that ITT expects economic conditions to remain challenging,
 but that the company expects to achieve continued profitability gains and
 deliver EPS growth consistent with expectations.
     "I'm comfortable with our outlook for the full year," said Giuliano.  "Our
 forecasts are grounded in realistic assumptions, and I am confident in our
 management team's ability to deliver another strong year. We are maintaining
 our commitment to increase operating margin and cash flow, and to deliver
 double-digit EPS growth."
 
     Primary Business Results
     Pumps and Complementary Products
     ITT Industries' Pumps and Complementary Products segment reported first
 quarter revenues of $430.1 million, down 1 percent from the first quarter
 2000, primarily due to the negative impact of foreign currency translation.
 Excluding the effect of foreign currency translation, revenues in this segment
 were up 1.5 percent.  Strong results in ITT's European water and wastewater
 businesses were offset by continued softness in the industrial pump market.
 Operating income for the quarter was $44.5 million, up $2.4 million or 6
 percent from the period last year, and operating margin for the first quarter
 rose 60 basis points, driven by process improvements, improved product mix,
 and cost control actions.  For the full year, ITT expects flat to modest
 growth in segment revenue and continued margin gains.
 
     Defense Products and Services
     Revenues for ITT Industries' Defense Products and Services segment were
 $303 million in the first quarter 2001, down $39.5 million from the period
 last year.  The decline is fully attributable to the expected wind-down of the
 SINGCARS program.  Ongoing process improvements, new higher margin contract
 wins, and early cost control actions helped raise first quarter operating
 income by $1.1 million or 5 percent to $22.5 million, despite the lower
 revenue base.  As a result, operating margin for the Defense segment grew by
 120 basis points.   Looking ahead, recent contract wins and a record backlog
 will partially offset the anticipated decline in SINCGARS sales through the
 end of the year.  As a result, full-year revenues in this segment are expected
 to decline less than was previously anticipated.  Improved mix and new
 programs should continue to drive margin expansion.
 
     Specialty Products
     ITT Industries' Specialty Products segment recorded first quarter 2001
 revenues of $257.9 million, off 3 percent from the period last year.
 Excluding the negative impact of foreign exchange translation, segment
 revenues were flat, as new vehicle platform wins in Europe and North America
 offset continued softness in the North American auto and leisure marine
 markets. Operating income in the first quarter was off $2.4 million or 7
 percent to $33.6 million, and segment operating margin declined 60 basis
 points due to startup costs associated with new platform wins, lower North
 American light vehicle production, and inefficiencies resulting from
 disruptions of production in the automotive industry.   Difficult market
 conditions in this segment are expected to result in flat revenues and a
 modest margin decline for the full year.
 
     Connectors and Switches
     First quarter revenues for the Connectors and Switches segment were $196.5
 million, up $28.8 million or 17 percent from the first quarter 2000. Strong
 results were driven by acquisitions made during the second and third quarters
 of last year and double digit sales growth in the industrial and
 transportation sectors.  These were partially offset by a downturn in the
 communications markets and the negative impact of foreign currency
 translation.  Operating income grew $7.4 million or 43 percent to $24.5
 million in the first quarter, reflecting higher revenues, contribution from
 higher-margin new products and aggressive cost-control measures to address the
 communications market downturn.  As a result, operating margin increased by
 230 basis points.  The outlook for the remainder of 2001 assumes continued
 softness and pricing pressure in the communications markets, combined with
 strength in the industrial and transportation markets, leading to mid-single-
 digit growth in the full-year.  New products and operational improvements are
 anticipated to drive continued margin expansion.
 
                 ITT Industries First Quarter Financial Results
                           (in millions, except EPS)
 
                                                         2001           2000
 
     Revenues                                        $1,186.0       $1,210.0
     Operating Income                                  $111.4         $100.0
     Net Income                                         $59.1          $51.3
     Shares, Diluted                                     90.4           89.8
     Diluted EPS                                        $0.65          $0.57
 
                 ITT Industries Second Quarter and 2001 Outlook
                           (in millions, except EPS)
                                                   2001           2001
                                               Second Quarter      Full Year
 
     Revenues                                 $1,150 - $1,170 $4,800 - $4,830
     Segment Operating Margin                   12.4% - 12.6%  11.9% - 12.1%
     Diluted EPS                                $0.82 - $0.86  $3.22 - $3.28
 
 
     About ITT Industries
     ITT Industries, Inc. (http://www.itt.com) supplies advanced technology
 products and services in key markets including: electronic interconnects and
 switches; defense communication, opto-electronics, information technology and
 services; fluid and water management and specialty products. Headquartered in
 White Plains, NY, the company generated $4.8 billion in 2000 sales, and
 employs approximately 42,000 people around the world.
 
     Certain material presented herein consists of forward-looking statements
 which involve known and unknown risks, uncertainties and other important
 factors that could cause actual results to differ materially from those
 expressed in, or implied from, such forward-looking statements.  Such factors
 include general economic conditions, foreign currency exchange rates,
 competition and other factors all as more thoroughly set forth in Item 1.
 Business and Item 7. Management's Discussion and Analysis of Financial
 Condition and Results of Operations -- Forward-Looking Statements in the ITT
 Industries, Inc. Form 10-K Annual Report for the fiscal year ended December
 31, 2000, and other of its filings with the Securities and Exchange
 Commission.
     In addition to the New York Stock Exchange, ITT Industries stock is traded
 on the Midwest, Pacific, London, Paris and Frankfurt exchanges.
 
     Note to Editors:  ITT Industries and its subsidiaries' press releases are
 available at no charge via fax and the Internet.  To receive releases by fax,
 call 800-758-5804, extension 110006.  For ITT Industries' news on the
 Internet, visit http://www.itt.com or http://www.prnewswire.com.
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X95371876
 
 

SOURCE ITT Industries, Inc.
    WHITE PLAINS, N.Y., April 24 /PRNewswire Interactive News Release/ --
 ITT Industries, Inc. (NYSE:   ITT) today announced first quarter 2001 net income
 of $59.1 million and diluted earnings per share (EPS) of $0.65, up 15 percent
 and 14 percent respectively over the first quarter 2000.  First quarter 2001
 revenues declined 2 percent to $1.19 billion from $1.2 billion in the period
 last year.  Excluding the impact of foreign currency translation, revenues
 were flat, as higher Connectors & Switches revenues offset an anticipated
 decline in the Defense segment.  First quarter operating income rose $11.4
 million or 11 percent to $111.4 million.
     The company's strong performance was attributable to its early and
 aggressive actions to address the U.S. economic slowdown, its substantial
 revenues from outside the United States, and its significant participation in
 relatively stable and predictable markets.
     "I'm especially pleased with our strong first quarter," said Lou Giuliano,
 Chairman, President and Chief Executive Officer of ITT Industries.  "Our
 management team has done an excellent job responding to challenging economic
 conditions.  Our results reflect cost-control moves we began when we first saw
 the U.S. economy was softening, and on-going improvements in our processes.
 The performance is also a testimony to the strengths of our global multi-
 industry portfolio, which is a real asset in times like these."
     "We benefit from the portfolio changes we have made over the last three
 years, shifting our business mix to less cyclical and more attractive
 markets," Giuliano added.  "Geographically, 40 percent of ITT's revenues come
 from outside the U.S.  And 60 percent of ITT's revenues come from relatively
 stable markets such as the U.S. Defense business and municipal water and
 wastewater treatment markets."
     "In addition to our earnings gain, we are also pleased with our $57
 million increase in free cash flow in the first quarter, and feel that this
 underscores the quality of our earnings," Giuliano said. "In the first
 quarter, our free cash flow of $51 million was 85 percent of net income,
 reflecting our emphasis on working capital performance and overall asset
 productivity."
     ITT Industries defines free cash flow as cash from operations minus
 capital expenditures.
 
     Second Quarter and Full Year Outlook
     Giuliano said that ITT expects economic conditions to remain challenging,
 but that the company expects to achieve continued profitability gains and
 deliver EPS growth consistent with expectations.
     "I'm comfortable with our outlook for the full year," said Giuliano.  "Our
 forecasts are grounded in realistic assumptions, and I am confident in our
 management team's ability to deliver another strong year. We are maintaining
 our commitment to increase operating margin and cash flow, and to deliver
 double-digit EPS growth."
 
     Primary Business Results
     Pumps and Complementary Products
     ITT Industries' Pumps and Complementary Products segment reported first
 quarter revenues of $430.1 million, down 1 percent from the first quarter
 2000, primarily due to the negative impact of foreign currency translation.
 Excluding the effect of foreign currency translation, revenues in this segment
 were up 1.5 percent.  Strong results in ITT's European water and wastewater
 businesses were offset by continued softness in the industrial pump market.
 Operating income for the quarter was $44.5 million, up $2.4 million or 6
 percent from the period last year, and operating margin for the first quarter
 rose 60 basis points, driven by process improvements, improved product mix,
 and cost control actions.  For the full year, ITT expects flat to modest
 growth in segment revenue and continued margin gains.
 
     Defense Products and Services
     Revenues for ITT Industries' Defense Products and Services segment were
 $303 million in the first quarter 2001, down $39.5 million from the period
 last year.  The decline is fully attributable to the expected wind-down of the
 SINGCARS program.  Ongoing process improvements, new higher margin contract
 wins, and early cost control actions helped raise first quarter operating
 income by $1.1 million or 5 percent to $22.5 million, despite the lower
 revenue base.  As a result, operating margin for the Defense segment grew by
 120 basis points.   Looking ahead, recent contract wins and a record backlog
 will partially offset the anticipated decline in SINCGARS sales through the
 end of the year.  As a result, full-year revenues in this segment are expected
 to decline less than was previously anticipated.  Improved mix and new
 programs should continue to drive margin expansion.
 
     Specialty Products
     ITT Industries' Specialty Products segment recorded first quarter 2001
 revenues of $257.9 million, off 3 percent from the period last year.
 Excluding the negative impact of foreign exchange translation, segment
 revenues were flat, as new vehicle platform wins in Europe and North America
 offset continued softness in the North American auto and leisure marine
 markets. Operating income in the first quarter was off $2.4 million or 7
 percent to $33.6 million, and segment operating margin declined 60 basis
 points due to startup costs associated with new platform wins, lower North
 American light vehicle production, and inefficiencies resulting from
 disruptions of production in the automotive industry.   Difficult market
 conditions in this segment are expected to result in flat revenues and a
 modest margin decline for the full year.
 
     Connectors and Switches
     First quarter revenues for the Connectors and Switches segment were $196.5
 million, up $28.8 million or 17 percent from the first quarter 2000. Strong
 results were driven by acquisitions made during the second and third quarters
 of last year and double digit sales growth in the industrial and
 transportation sectors.  These were partially offset by a downturn in the
 communications markets and the negative impact of foreign currency
 translation.  Operating income grew $7.4 million or 43 percent to $24.5
 million in the first quarter, reflecting higher revenues, contribution from
 higher-margin new products and aggressive cost-control measures to address the
 communications market downturn.  As a result, operating margin increased by
 230 basis points.  The outlook for the remainder of 2001 assumes continued
 softness and pricing pressure in the communications markets, combined with
 strength in the industrial and transportation markets, leading to mid-single-
 digit growth in the full-year.  New products and operational improvements are
 anticipated to drive continued margin expansion.
 
                 ITT Industries First Quarter Financial Results
                           (in millions, except EPS)
 
                                                         2001           2000
 
     Revenues                                        $1,186.0       $1,210.0
     Operating Income                                  $111.4         $100.0
     Net Income                                         $59.1          $51.3
     Shares, Diluted                                     90.4           89.8
     Diluted EPS                                        $0.65          $0.57
 
                 ITT Industries Second Quarter and 2001 Outlook
                           (in millions, except EPS)
                                                   2001           2001
                                               Second Quarter      Full Year
 
     Revenues                                 $1,150 - $1,170 $4,800 - $4,830
     Segment Operating Margin                   12.4% - 12.6%  11.9% - 12.1%
     Diluted EPS                                $0.82 - $0.86  $3.22 - $3.28
 
 
     About ITT Industries
     ITT Industries, Inc. (http://www.itt.com) supplies advanced technology
 products and services in key markets including: electronic interconnects and
 switches; defense communication, opto-electronics, information technology and
 services; fluid and water management and specialty products. Headquartered in
 White Plains, NY, the company generated $4.8 billion in 2000 sales, and
 employs approximately 42,000 people around the world.
 
     Certain material presented herein consists of forward-looking statements
 which involve known and unknown risks, uncertainties and other important
 factors that could cause actual results to differ materially from those
 expressed in, or implied from, such forward-looking statements.  Such factors
 include general economic conditions, foreign currency exchange rates,
 competition and other factors all as more thoroughly set forth in Item 1.
 Business and Item 7. Management's Discussion and Analysis of Financial
 Condition and Results of Operations -- Forward-Looking Statements in the ITT
 Industries, Inc. Form 10-K Annual Report for the fiscal year ended December
 31, 2000, and other of its filings with the Securities and Exchange
 Commission.
     In addition to the New York Stock Exchange, ITT Industries stock is traded
 on the Midwest, Pacific, London, Paris and Frankfurt exchanges.
 
     Note to Editors:  ITT Industries and its subsidiaries' press releases are
 available at no charge via fax and the Internet.  To receive releases by fax,
 call 800-758-5804, extension 110006.  For ITT Industries' news on the
 Internet, visit http://www.itt.com or http://www.prnewswire.com.
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X95371876
 
 SOURCE  ITT Industries, Inc.

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