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The trend we reported two weeks ago for U.S. Defense contractor’s results has generally, with some exceptions, continued during this year’s Reporting Season. (See: BATTLESPACE ALERT Vol.13 ISSUE 03, 27 January 2011, U.S. DEFENSE MAJORS CONTINUE STRONG EARNINGS)

ITT Corporation

03 Feb 11. ITT Corporation (NYSE:ITT – News) reported 2010 fourth-quarter revenue of $3bn and income from continuing operations of $272m, or $1.46 per share. Excluding special items, income from continuing operations was $253 m, or $1.36 per share, reflecting year-over-year growth of 42 percent.

For the full year 2010, ITT reported revenue of $11bn and income from
continuing operations of $654m, or $3.53 per share. Excluding special items, income from continuing operations was $818m, resulting in a record $4.41 per share, an 18 percent increase over 2009. For the full year, free cash flow was $937m, a 104 percent conversion of net income from continuing operations adjusted for non-cash special items.

“We are very pleased with the exceptional strategic and operating performance delivered by our teams across the globe in 2010. We realized outstanding productivity across our businesses, while driving overall top-line growth, generating very strong free cash flow and investing for our future,” said Steve Loranger, ITT’s chairman, president and chief executive officer. “This record-breaking year provides momentum for continuing strong performance in 2011 and sets a solid foundation for our transformation into three independent publicly traded companies by year end.”

2010 Fourth-Quarter and Full-Year Business Segment Results

Defense & Information Solutions

Fourth-quarter 2010 revenue for the Defense segment was $1.6bn, up 5
percent compared to the same period in 2009, driven largely by increased volumes for tactical radios and special purpose jammers. Fourth-quarter operating income for the segment grew to $239m, up 18 percent on a comparable basis, primarily driven by operational productivity initiatives.

Full-year 2010 revenue for the segment was $5.9bn, down 3 percent compared with 2009, as expansion into growth areas was offset primarily by previously anticipated declines in counter improvised explosive device units.

For the full year, operating income for the segment was $752m, a 1 percent year-over-year decline, with productivity gains partially offsetting the impact of lower revenue.

Incumbent protests on $2.7bn in service contracts were resolved, including the NASA Space Communications Network Systems contract and the Kuwait facilities contract.

Fluid Technology

The Fluid Technology segment reported fourth-quarter 2010 revenue of $1.1bn, up 16 percent on a year-over-year basis, primarily driven by the strategic acquisitions completed during the year. Organic revenue(defined as total revenue excluding the impacts of foreign exchange and acquisition and divestiture activity) was up 4 percent, driven by growth in the Industrial Process business within the chemical and oil and gas sectors in emerging markets, and strong performance by the Residential & Commercial Water business in North America. Fourth-quarter segment operating income was $142m, up 36 percent from the comparable prior-year period, driven by higher revenue, incremental productivity and lower restructuring and realignment expense.

For the full year, segment revenue rose 9 percent to $3.7bn, primarily driven by acquisitions. The segment generated operating income of $479m, a 22 percent year-over-year increase, driven primarily by higher revenue and outstanding operating performance.

Motion & Flow Control

Fourth-quarter 2010 revenue for the Motion & Flow Control segment was $333m, which was flat on a comparable basis. Organic revenue was up 4 percent, as significant growth in the aerospace and connector markets offset reductions in automotive volume as the pri

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