24 Jul 02. ITT Industries Inc.’s second-quarter net income rose 22%, helped by growth in its defense-electronics segment, and the company raised its full-year outlook.
ITT, which makes electronics, pumps and defense gear, said on Wednesday that it had net income of $92.9m, or 99 cents a share, (2001: $76.1m, or 84 cents).
“Our defense business had a terrific quarter, with revenues up 32% over the
second quarter last year,” Chairman, President and Chief Executive Lou Giuliano said in a written statement.
Comparison with year-earlier results was made easier because of an accounting- rule change related to goodwill amortization. Goodwill represents the amount paid for a company by an acquirer in excess of the acquired company’s book value. Under the rules that were eliminated at the beginning of 2002, goodwill was written down on a regular quarterly basis over as long as 40 years. Now, routine amortization doesn’t take place; instead, companies can leave goodwill on their balance sheets indefinitely, provided that it doesn’t become impaired.Excluding goodwill amortization, ITT earned $85.3m, or 94 cents ashare, a year earlier. Companies are required to say what year-earlier results would have been if the accounting rules had been in effect in 2001.Revenue, meanwhile, rose 11% to $1.32bn from $1.18bn.
ITT raised its full-year earnings forecast to a range of $3.58 to $3.68 a share. This is the second time the company has raised its full-year earnings target. Initially, in January, the company said it expected 2002 earnings of $ 3.45 to $3.65 a share, then raised this slightly in April to $3.50 and $3.65 a share.Analysts surveyed by Thomson First Call put the company’s full-year earnings at $3.59 a share. Last year, ITT had net income of $276.7m, or $3.05 a share, on revenue of $4.68bn.