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Dec 31, 2021
ITT Q4 2021 Earnings Report
ITT reported Q4 2021 earnings, with adjusted EPS of $1.06 and initiated 2022 guidance.
Key Takeaways
ITT reported a revenue decrease of 3% year-over-year in Q4 2021, driven by global supply chain disruptions and a tough prior year comparison related to auto OE demand. However, adjusted earnings per share increased by 5% compared to the prior year, driven by higher segment operating income, share repurchases, and a lower effective tax rate.
Q4 orders were up 9% (10% organic), driven by strong demand across Industrial Process and Connect & Control.
Q4 segment operating margin was 17.9%, up 100 bps; adjusted segment operating margin was 18.2%, up 130 bps, driven by strong pricing and productivity.
ITT initiated 2022 EPS guidance of $4.22 to $4.66, up 16% to 28%; adjusted EPS guidance of $4.30 to $4.70, up 11% at the midpoint.
ITT announced a 20% increase in the quarterly dividend to $0.264 per share.
Revenue by Segment
Forward Guidance
ITT anticipates continued disruptions in the global supply chain stemming from labor shortages, supplier delays, and raw material inflation, which we anticipate will persist through at least the first half of 2022.
Positive Outlook
- Revenue growth of 7% to 9%, or up 9% to 11% on an organic basis
- Segment operating margin of 17.5% to 18.4%, and adjusted segment operating margin of 17.6% to 18.5%, up 40 to 130 bps
- Earnings per share of $4.22 to $4.66
- Adjusted earnings per share of $4.30 to $4.70 per share, up 6% to 16%
- Free cash flow of $300 million to $325 million, representing free cash flow margin of 10% to 11% for the full year
Challenges Ahead
- Continued disruptions in the global supply chain stemming from labor shortages
- Supplier delays
- Raw material inflation
- Global uncertainty from the pandemic
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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