ITT CFO Seeks Acquisitions as Oil & Gas Projects Grow
ITT Corp. (ITT) is expanding pump-making capacity and seeking acquisitions as shipments to oil and gas companies jumped by half in the third quarter, helping drive earnings that outpaced estimates.
“Global oil and gas projects were up 50 percent in the quarter, so that’s the real workhorse for us,” ITT Chief Financial Officer Tom Scalera said in a telephone interview. “We like the long-term demand drivers around oil and gas.”
ITT, based in White Plains, New York, today raised its annual forecast for adjusted earnings per share to $1.97 to $2, from $1.86 to $1.92, after reporting third-quarter adjusted profit of 54 cents. That was higher than analysts’ estimates of 48 cents. Sales in the quarter rose 16 percent to $634 million.
ITT is expanding production at its pump factory in Seneca Falls, New York and earlier this month opened a new $34 million pump-making plant in South Korea to handle the higher demand, Scalera said.
The increase in oil and gas pump sales during the quarter didn’t include those from Bornemann Pumps, which ITT bought for about $267 million in November 2012. The success of the Bornemann purchase may lead ITT to look at larger companies in its acquisition pipeline, Scalera said.
“The pipeline has generally been between $15 million and $50 million and that’s largely where the focus is,” Scalera said. “But as a result of Bornemann, we would look a little bit more beyond the $50 million range than perhaps we did a year ago.”
ITT rose 7.33 percent to $39.69 at 3:35 p.m. in New York. The stock has risen 58 percent this year as of yesterday, outpacing a 24 percent gain in the Standard & Poor’s 500 Index.
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