ITT Corp. (ITT, Financial) filed Quarterly Report for the period ended 2010-03-31.
Itt Corp. has a market cap of $10.18 billion; its shares were traded at around $55.57 with a P/E ratio of 14.47 and P/S ratio of 0.93. The dividend yield of Itt Corp. stocks is 1.8%.ITT is in the portfolios of Jim Simons of Renaissance Technologies LLC, Paul Tudor Jones of The Tudor Group, John Keeley of Keeley Fund Management, Steven Cohen of SAC Capital Advisors, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
During the first quarter of 2010, we received orders of $2,518, a decrease of $68 or 2.6% as compared to the prior year. This decline was primarily attributable to two large Defense orders received during the first quarter of 2009, a $317 CREW order and a $121 U.S. Night Vision order. Order growth within both our Fluid and Motion & Flow segments partially offset this decline.
Driven by leverage from the revenue growth previously mentioned, as well as a shift in product mix and significant benefits from various cost saving initiatives, gross profit for the quarter ended March 31, 2010 increased $59, or 8.8% to $728, as compared to the prior year. The benefits from cost saving initiatives more than offset significantly higher material, labor and other overhead costs incurred during 2010 as compared to the prior year. Gross margin increased 140 basis points to 27.6%.
Income tax expense was $77 for the quarter ended March 31, 2010, resulting in an effective tax rate of 34.5%, compared to expense of $10 and an effective rate of 5.1% for the comparable prior year period. Impacting the 2010 effective rate was the ratification of the U.S. Patient Protection and Affordable Care Act (the Healthcare Reform Act). Effective January 1, 2013, the Healthcare Reform Act eliminates the tax deduction for benefits related to subsidies received for prescription drug benefits provided under retiree healthcare benefit plans that were determined to be actuarially equivalent to Medicare Part D. As a result of the change in tax status for the federal subsidies received, we recorded a discrete income tax charge of $12 during the first quarter of 2010. In addition, the 2009 effective rate was favorably impacted as a result of the restructuring of certain international legal entities, which reduced the income tax provision by $58. This reduction was based on our determination that the excess investment for financial reporting purposes over the tax basis in certain foreign subsidiaries will be indefinitely reinvested and the associated deferred tax liability would no longer be required.
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Itt Corp. has a market cap of $10.18 billion; its shares were traded at around $55.57 with a P/E ratio of 14.47 and P/S ratio of 0.93. The dividend yield of Itt Corp. stocks is 1.8%.ITT is in the portfolios of Jim Simons of Renaissance Technologies LLC, Paul Tudor Jones of The Tudor Group, John Keeley of Keeley Fund Management, Steven Cohen of SAC Capital Advisors, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
Highlight of Business Operations:
ITT reported revenue of $2,636 during the first quarter of 2010, an increase of 3.1% from $2,557 reported during the first quarter of 2009. The growth primarily reflects year-over-year improvement within our Motion & Flow segment, partially offset by volumes declines within portions of our Defense segment as compared to strong prior year results for tactical radios and counter improvised explosive device units. Operating income of $250, an increase of 12.6% from the prior year, benefitted from revenue growth and significant savings from productivity initiatives. Income from continuing operations of $146, or $0.79 per diluted share, a decline of 21.9% from the prior year, was unfavorably impacted by a $67 increase in tax expense.During the first quarter of 2010, we received orders of $2,518, a decrease of $68 or 2.6% as compared to the prior year. This decline was primarily attributable to two large Defense orders received during the first quarter of 2009, a $317 CREW order and a $121 U.S. Night Vision order. Order growth within both our Fluid and Motion & Flow segments partially offset this decline.
Driven by leverage from the revenue growth previously mentioned, as well as a shift in product mix and significant benefits from various cost saving initiatives, gross profit for the quarter ended March 31, 2010 increased $59, or 8.8% to $728, as compared to the prior year. The benefits from cost saving initiatives more than offset significantly higher material, labor and other overhead costs incurred during 2010 as compared to the prior year. Gross margin increased 140 basis points to 27.6%.
Income tax expense was $77 for the quarter ended March 31, 2010, resulting in an effective tax rate of 34.5%, compared to expense of $10 and an effective rate of 5.1% for the comparable prior year period. Impacting the 2010 effective rate was the ratification of the U.S. Patient Protection and Affordable Care Act (the Healthcare Reform Act). Effective January 1, 2013, the Healthcare Reform Act eliminates the tax deduction for benefits related to subsidies received for prescription drug benefits provided under retiree healthcare benefit plans that were determined to be actuarially equivalent to Medicare Part D. As a result of the change in tax status for the federal subsidies received, we recorded a discrete income tax charge of $12 during the first quarter of 2010. In addition, the 2009 effective rate was favorably impacted as a result of the restructuring of certain international legal entities, which reduced the income tax provision by $58. This reduction was based on our determination that the excess investment for financial reporting purposes over the tax basis in certain foreign subsidiaries will be indefinitely reinvested and the associated deferred tax liability would no longer be required.
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