(RTTNews) - Engineering and manufacturing company ITT Corp. (ITT: News ) reported Friday a profit for the third quarter that plunged from last year, hurt by significant charges related to estimated future asbestos liabilities as well as a 6% drop in revenue. The results also reflected improved operating performance primarily driven by productivity initiatives.

Excluding items, earnings per share from continuing operations declined 7%, and came in ahead of analysts' expectations. Quarterly revenues also declined 6% and came in line with consensus estimate. The company also raised its adjusted earnings guidance for fiscal 2009.

In a statement, chairman, president and chief executive officer, Steve Loranger said, "While market challenges will remain into the near future, we believe the Company is doing what is required to emerge from the current economic environment as a much stronger company that is well positioned to grow and improve its financial performance over time."

Third Quarter Results

The White Plains, New York-based provider of advanced technology products and services reported net income of $59.0 million or $0.32 per share for the third quarter, sharply lower than $216.3 million or $1.17 per share in the prior-year quarter.

Income from continuing operations plunged to $66.0 million or $0.36 per share from $204.5 million or $1.11 per share in the year-ago quarter.

The results for the latest quarter include a net charge to continuing operations of after-tax $131 million or $0.71 per share related to future asbestos-related claims over the next 10 years, offset by expected insurance recoveries. These claims are associated with certain ITT products, primarily pumps sold prior to 1985 that include gaskets and packing that allegedly contain asbestos and were manufactured by other companies.
Excluding special items, adjusted income from continuing operations during the latest quarter was $190 million or $1.03 per share. On average, sixteen analysts surveyed by Thomson Reuters expected the company to earn $0.90 per share for the third quarter. Analysts' estimates typically exclude special items.

Sales and revenues for the quarter declined 6% to $2.70 billion from $2.88 billion in the same quarter last year, and came in line with ten Wall Street analysts' consensus estimate of $2.70 billion. Excluding the impacts of foreign exchange and acquisitions, revenues for the quarter was down 4%.

Segmental details

Revenues from defense electronics & services segment for the third quarter edged up 1.8% to $1.57 billion over last year. Segment operating income grew 8.3% to $203.3 million from last year, while operating margins expanded 80 basis points on strong productivity gains and favorable performance on fixed price contracts.

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