ITT Corporation (ITT) is riding out the tough global manufacturing environment. The company recently surprised on the Zacks Consensus Estimate for the fourth straight quarter. ITT is trading with a forward P/E of 13.8.

Company Description

ITT Corporation is a engineering and manufacturing company with operations on all 7 continents. It has 3 business segments: water and fluids management, global defense and security and motion and flow control.

ITT Corporation Beat by 32.50% in the Second Quarter

On July 31, ITT Corporation reported much better than expected second quarter results that blew by the Zacks Consensus Estimate by 26 cents. Earnings per share were $1.06 compared to the Zacks Consensus Estimate of 80 cents.

Revenues fell 9% to $2.8 billion from the year ago quarter. Two out of three of the segments saw revenues decline year over year. Revenues slid 15% in the Fluid Technology segment and 30% in the Motion & Flow Control segment.

Revenues were flat in the Defense segment which saw strong sales of battlefield radios in the communications systems business.

The company acknowledges that the weak global economy is impacting orders in many of its commercial markets. However, greater productivity is contributing to income.

2009 Guidance Raised

Given the big beat in the second quarter, the company raised its full year guidance to $3.50 to $3.70 from the prior range of $3.20 to $3.60.

2009 Zacks Consensus Estimate Rises

Covering analysts scrambled to adjust their earnings guidance after the second quarter surprise and higher forecast.

The third quarter Zacks Consensus Estimate has actually pulled back by 2 cents to 89 cents from 91 cents in the last 30 days.

However, analysts are still bullish on the full year with the Zacks Consensus Estimate rising 5 cents to $3.63 in the last 30 days which is in line with the new guidance range.

Value Fundamentals

ITT Corporation is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 2.64. The company also has a stellar 5-year average return on equity (ROE) of 19.50%.

As an added bonus, ITT also pays a dividend, with a current yield of 1.70%.

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