| ITT Corporation (ITT) is retreating after its CEO revealed that the company had refrained from speaking to investors and analysts over the past several weeks due to a pending charge for asbestos litigation. ITT took a $131M charge to cover future payments stemming from asbestos liabilities. "The most prudent course was to enter a quiet period while the asbestos charge was being finalized," explained ITT CEO Steve Loranger during the company's conference call. "When we have activity inside the company that could be material [to earnings], we have to err on the side of caution," the CEO added. In a note to investors on October 19, an FBR Capital analyst speculated that ITT was refusing to speak with analysts or investors because it was preparing to either sell itself, carry out a breakup/spin/merger, or execute a "transformational" acquisition or joint venture. In the wake of the analyst's comments, some investors may have thought that ITT was on the verge of being acquired. Meanwhile, ITT today reported Q3 EPS of $1.03, versus analysts' consensus estimate of 90c. ITT also increased its 2009 EPS guidance to $3.70-$3.74 from its previous forecast of $3.50-$3.70. In early afternoon trading, ITT slumped $3.36, or 6.18%, to $51. :theflyonthewall.com |
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