On Wednesday, ITT (NYSE:ITT) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
ITT reported strong Q1 results with a 33% revenue growth and 25% EPS increase.
The SPX Flow acquisition has shown early positive contributions, integrating into the Flow Technologies segment.
ITT achieved significant market share gains across various segments, notably in aerospace, defense, and friction.
The company has initiated a full-year adjusted EPS guidance range of $7.70 to $8.00, expecting 37% revenue growth.
Management highlighted successful synergy capture from the SPX Flow acquisition and ongoing strategic investments.
Despite geopolitical challenges, particularly in the Middle East, the company maintains a positive outlook.
Luca Savi, CEO, expressed confidence in the company’s strategic direction and seamless leadership transition plans.
Full Transcript
OPERATOR
Welcome to ITT’s 2026 first quarter conference call. Today is Wednesday, May 6, 2026. Today’s call is being recorded and will be available for replay beginning at 12:00pm Eastern Time. At this time all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1-1 on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star 1-1 again, we ask that you please pick up your handset to allow optimal sound quality. It is now my pleasure to turn the call over to Carlene Salvage, Vice President of Investor Relations and FP&A. You may begin.
Carlene Salvage (Vice President, Investor Relations and FP&A)
Thank you Kathy and good morning. Joining me in Stanford today are Luca Savi, ITT’s chief executive officer and President, and Emmanuel Caparelli, Chief Financial Officer. Today’s call will cover ITT’s financial results for the three month period ended April 4, 2026 which we announced this morning. Please refer to slide 2 of the presentation available on our website or where we note that today’s comments will include forward looking statements that are based on our current expectations. Actual results may differ materially due to several risks and uncertainties, including those described in our 2025 annual report on Form 10-K and other recent SEC filings. Except where otherwise noted, the first quarter results we present this morning will be compared to the first quarter of 2025 and include certain non GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures are detailed in our press release and in the appendix of our presentation, both of which are available on our website. As previously communicated during our fourth quarter 2025 earnings call going forward, ITT will include intangible amortization expenses related to acquisitions as a separate line item within the Consolidated Statement of Operations and in its adjustments to earnings in 2025. The impact of this reporting change on earnings per share was $0.13 in Q1 and $0.47 for the full year. All adjusted EPS figures presented going forward will be on this basis a full reconciliation of the impact of the revision to adjusted operating income and margin income from continuing operations and EPS for each quarter in 2025 and the full year can be found in the supplemental materials at the end of our presentation available on our website. With that, it is now my pleasure to turn the call over to Lucaa, who will begin on Slide three.
Luca Savi
Thank you Carlene and good morning. Before I begin, I want to recognize our employees across ITT for delivering a very strong start to the year. In particular our Middle east teams who delivered despite the ongoing conflict, the supply chain disruptions and the challenges this has represented to their professional and personal lives. Thank you. In Q1 we demonstrated solid momentum across the portfolio thanks to the disciplined execution and the tangible benefits of our M&A strategy. We delivered outstanding orders growth above market revenue expansion and robust earnings exemplified by our 25% EPS growth in the quarter. We are truly pumped up. Here are some highlights. We grew orders 26% at 8% organically. We grew revenue 33% and 11% organically. We expanded margin by 130 basis points and we delivered 25% adjusted EPS growth. I’m also encouraged by SPX Flow’s strong start in month one. We already produced net earnings, cash accretion and promising top line growth. This is all included in our newly formed Flow Technologies segment that now combines industrial process and SPX Flow. This was an outstanding quarter. Let’s dive into the details. We grew revenue 33% and 11% organically with all businesses contributing. CCT up 17%, grew industrial connector sales by 27% and aerospace and defense by nearly 20% and were already benefiting from the Boeing price negotiation closed last year. MT increased revenue by 15% and 5% organically in an automotive market down 3 as friction outperformed global vehicle production by more than 1400 basis points. And to top it off, Flow Technologies revenue was up 61% or 12% organically. The team delivered higher project sales and including from Svanehøj which were up 44%. Well done Glenn. Short cycle also grew 10% due to market share gains in all product categories on orders. ITT grew 26% and 8% organically in Q1, showing broad strength across our segments. CCT grew 10% organically on the back of strong aerospace demand and market share gains in industrial connectors. Inflow technologies we deliver 44% orders growth and 7% organically driven by share gains in show cycle including baseline pumps, aftermarket and valves. Valves up 24% continues to benefit from a GLP-1 project that keeps expanding in scope and friction. Continued to gain market share with significant platform awards including in the high performance segment. And last but not least, our book to bill was 1.09. We delivered equally strong margin expansion of 130 basis points with all businesses contributing. Flow Technologies delivered 23.7% operating margin up 100 basis points thanks to significant contributions from volume and to a lesser extent price at 21.1%. MT delivered 130 basis points margin progression as productivity and volume growth more than offset price pressure. Finally, CCT expanded margin to 19.3% as volume growth and price both contributed. Moving to capital deployment on March 2nd. We closed the SPX flow acquisition one month ahead of schedule and with a leverage ratio comfortably below 3 at 2.7. The newly created Flow Technologies segment boasts nearly $3 billion in revenue and is a global flow leader with premier brands in pumps, valves, mixers and and other process solutions. On the first day, the entire ITT leadership team actively participated in person to town hall meetings around the world with SPX Flow employees. We laid out our vision and our expectations and answered questions from highly engaged employees. I was fortunate enough to be in Delavan, Wisconsin together with Rudy, our Waukesha Cherryboro leader. I was encouraged by what I saw in the plant, by the enthusiasm of the local team, by their deep knowledge of the business and their openness to do better and to do more. I also experienced this enthusiasm with Wendy, our Mixing Solutions leader at our two other sites in Rochester, New York and Palmyra, Pennsylvania. Their team has been working hard to improve material flows and overall equipment efficiency. Bartek, Wendy, Rudy and I also share future growth plans and while still early in the year, I’m heartened by the orders and sales growth we deliver in the first quarter to achieve high single digit revenue growth for 2026. When it comes to synergies, the Flow Technologies team has been hard at work identifying and implementing actions to secure the $80 million cost synergies. We have executed the first tranche related to corporate G and A cost reductions and we’re on track to deliver a third of the total synergies in year one. We’re also working hard to deliver commercial synergies and last week the Waukesha Cherry-Burrell business of SPX won its first order for an ITT Bornemann Twin Screw Pump. Well done Rudy and Tim and Rodolfo. I expect more. Finally, as part of our capital allocation strategy., we continue to cultivate and be active on smaller sized M&A opportunities. In addition, in March we also deployed $100 million towards share repurchases. Moving on to Guidance Today we initiate on the new basis our full year adjusted EPS guidance with a range of $7.70 to $8, up 9% at the midpoint. We’re guiding to 37% revenue growth and 5% organic growth at the midpoint with a book to bill above one and we expect SPX Flow to contribute low teens net adjusted EPS accretion. This guidance builds on the Profitable Growth ITT has Delivered over several years Let us review our top line growth trajectory since 2023 on slide 4. Over the past three years we have delivered outstanding top line growth with orders and revenue up over 9% on average every year. And we expect this strong growth trend to continue in 2026, bolstered by market share gains in our legacy businesses and the contribution of SPX Flow in cct. For example, as defence spending ramps up, we’ve been awarded large multi year contracts like F35 and RSS in the US and ground vehicles, radar and precision guided systems in Europe. We’re well positioned to capture a significant portion of the incremental future spend out of our Weinstead facility in Germany. During my recent visit there, I sat down with our project managers who are collaborating with European contractors on the development of customized connectors for new defense applications. Well done Marco and Junaid on fostering this level of customer intimacy in MT. Our Koni business grew more than 30% over the last three years to become a $200 million platform for growth and the shock absorber leader for high speed trains in China. Moreover, our Friction business continues to conquer platforms and win market share as demonstrated by the Q1 friction OE outperformance of over 1400 basis points. the end of last year, friction reached 32% of the global auto OE market and the share gain journey continues. Flow Technologies has been growing at a 15% revenue CAGR since 2023. In addition to the 12% organic growth and the 61% total revenue growth in Q1 this year, we continue to differentiate through a flawless project execution as demonstrated by svanehoi’s growth of 44% with a book to bill of a 1.2 moving to backlog. We have nearly doubled it in the last three years and it will continue to grow in 2026 as we strive towards a book to bill above one this year as well. With that, let me now turn the call over to Emmanuel to discuss Q1 results in detail on slide 5.
Emmanuel Caparelli
Thank you and good morning. As Luca highlighted, we kicked off the year with a very strong quarter in Q1. We delivered outstanding growth across the business in orders, revenue margin and EPS. Our teams delivered $1.2 billion in revenue, up 33% in total and 11% organically. CCT grew 17% organically, fueled by strength in aerospace and defense and industrial which were up approximately 20%. We’re also realizing the benefit of the Boeing contract renewal flow technology grew 61% in total and 12% organically driven by strong project shipments including Svenhoy, which is up 44% and short cycle market share gains, especially in Valve which is up 19%. MT grew 5% organically, a significant achievement in a down market. Friction OE outperformed global automotive production by over 1400 basis points with all regions above 1000 basis points. NSPX Flow added 17 points of growth to ITT on profitability. Operating income grew 42% and margin expanded 130 basis points, primarily driven by strong operational performance in our legacy businesses and the SPX Flow contribution. MT operating income grew 22% for a margin of 21.1% as the team drove net productivity of 220 basis points. Flow Technologies expanded margin 100 basis points to 23.7% driven by price and volume leverage. CCT delivered 20% income growth to a margin of 19.3% driven by aerospace volume growth and Boeing contract benefits. As previously stated, intangible amortization expense related to acquisitions is now excluded from adjusted operating income including in the segment EPS of $1.98 on the new basis was up an outstanding 25% versus the prior year. You will note the immediate net accretion of the XPXflow acquisition. Lastly, free cash flow of $14 million was impacted by $71 million of one time acquisition related expenses. Excluding these impacts, free cash flow was up 10% year over year. Let’s now turn to the Q1 EPS bridge on slide 6. The 25% EPS growth was primarily driven by strong operational performance delivered by all businesses compounded by the month. One net contribution of SPX Flow Included in the SPX Flow contribution is income from operations partially offset by the higher interest expense and tax rate as well as the dilution from the December equity issuance and the equity given to Lonestar as part of the acquisition consideration. There were four additional working days in Q1 versus the prior …
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