“We’ve been winning that business because we’ve been taking business from others,” Chief Executive Officer Denise Ramos said in a telephone interview yesterday. “We’ve had great growth rates in automotive in Europe, which frankly we did not anticipate with the type of environment we saw in Europe.”
ITT’s brake-pad orders in western Europe rose 9 percent in the second quarter while industrywide light-vehicle sales declined 5 percent in the region. ITT, based in White Plains, New York, is now expanding in the U.S. and China, where orders increased 84 percent in the first half of the year, Ramos said.
The faster-than-expected growth at the auto parts unit led ITT to increase its forecast for 2013 earnings per share to as much as $1.92 from a previous projection of a maximum of $1.90, according to a statement yesterday. ITT also raised the lower end of its revenue growth rate to 10 percent from 9 percent.
ITT rose 9.9 percent to $34.34 at the close in New York yesterday, the largest one-day gain since Aug. 3. The shares have surged 46 percent this year, outpacing an 20 percent gain on the Standard & Poor’s 500 Index.
ITT has almost 50 percent of the market for brake pads in Europe and expects that to rise, Ramos said. Competitors in Europe include Honeywell International Inc. (HON) and Federal-Mogul Corp. (FDML), she said. Growth will accelerate in both China and the U.S., where the company has only recently begun selling brake pads.
In China, ITT plans to expand a plant to increase capacity fourfold to 20 million brake pads a year. In the U.S., General Motors Co. (GM) added ITT to its supplier list since the beginning of the year, and ITT is working to become a Chrysler Group LLC supplier within a year.
“We are gaining market share in the U.S. and we’re gaining market share in China,” Ramos said. “We continue to stay ahead of the curve.”
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