ITT (ITT) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue grew 9.9% to $3,283M, with 8.1% organic growth; adjusted operating margin rose 100 bps to 16.9%, adjusted EPS increased 17% to $5.21, and FCF reached $430.4M.

• Record backlog, share gains and strong execution supported profitable growth; 2024 guidance calls for 3%–6% organic revenue growth and 5%–13% adjusted EPS growth.

Financial highlights

• FY adjusted operating income was $554.6M, up 17.1%; reported operating income was $528.2M, up 12.9%.

• FY net income attributable to ITT Inc. was $410.5M versus $367.0M; diluted EPS was $4.97 versus $4.40, and adjusted EPS was $5.21 versus $4.44.

• FY operating cash flow was $538.0M; FCF rose to $430.4M from $174M, supported by higher net income, stronger receivables collections and improved inventory management.

• Q4 revenue was $829.1M, up 7.0% reported and 4% organically; adjusted operating income increased 3.6% to $140.9M.

• Q4 adjusted EPS rose 3.9% to $1.34 from $1.29, while reported operating income fell 21.3% to $118.8M.

Outlook and guidance

• FY 2024 revenue growth guidance is 9%–12%, including 3%–6% organic growth; operating margin guidance is 16.7%–17.3% and adjusted operating margin guidance is 16.9%–17.5%.

• FY 2024 EPS guidance is $5.37–$5.82; adjusted EPS guidance is $5.45–$5.90, or 9% growth at the midpoint.

• FY 2024 FCF guidance is $435M–$475M, equal to 12%–13% of revenue; backlog, improved price/cost, productivity and working-capital improvements support the outlook, partly offset by first-year Svanehøj dilution.