ITT cuts jobs, lowers outlook as economy sours

NEW YORK: Diversified manufacturer ITT Corp scaled back its full-year earnings and revenue forecast on Friday as it plans to cut jobs and ramp up its restructuring in the face of a souring economy and unfavorable exchange rates. The company, which has been selling off slower-growing units to focus on its water treatment, defense and motion control businesses, said it would spend $48 million more than it expected this year, mostly on job reduction, as it accelerates efforts to reshape itself.

ITT joins a growing list of US companies scaling down employment as they brace for a recession, including Wall Street giant Goldman Sachs, carmaker Chrysler, drugmaker Merck & Co and soft drinks company PepsiCo Inc. Because of the extra restructuring costs, ITT cut its full-year earnings forecast to a range of $3.97 to $4.03 per share, from its previous outlook of $4.11 to $4.17.

Wall Street was expecting $4.17, on average, according to Reuters Estimates. The company, which makes a range of pumps, filters and military electronics, also cut its full-year revenue forecast by $100 million to a range of $11.5 billion to $11.6 billion due to currency exchange levels. ITT, which sells many of its products overseas, has suffered from the recent rise in the value of the US dollar.

That sharp rise has also hurt other manufacturing conglomerates with big overseas markets, such as General Electric Co, United Technologies Corp and Honeywell International Inc. "We are preparing for projected softening of the global economy," ITT Chief Executive Steve Loranger said in a statement.

The company plans to reduce head count at its U.S. and European operations, but gave no details. Shares of ITT fell 8 percent to a four-year low of $38.07 in early trade on the New York Stock Exchange. Also on Friday, the White Plains, New York-based company reported third-quarter earnings of $1.12 per share from continuing operations, excluding one-time items. That beat analysts' average estimate of $1.06. Sales rose 32 percent to $2.9 billion.