New name for ITT

ITT announced the new name for its defense business that has been carved out. ITT Exelis.

ITT’s current water and wastewater, residential and commercial water and flow control businesses will become the company Xylem. It will provide equipment and services such as collection and distribution.

The company’s current defense and information solutions segment will become ITT Exelis and provide C4ISR-related products, systems, information and technical services.

Charges, Not Buyout, for ITT

From a report on Bloomberg, ITT has announced that recent silence from its management stems from its consideration on handling charges from asbestos related claims, and not from a potential merger or sale. Investors took this as bad news, marking down ITT stock by 6.7%, its biggest daily decline of the year. Apparently investors and analysts believe this leaves ITT in a weak position, with defense orders declining 34% year-on-year and the backlog decreasing nearly 6%. Despite better than estimated earnings ($3.74 per share versus estimated $3.50 back in July), Deutsche Bank analyst Nigel Coe sees weakness:

“We acknowledge that defense bookings are lumpy by nature but ITT’s backlog coverage” is now only 75 percent of its projected 2010 defense sales, Coe wrote in his note. Orders for the company’s military hand-held radio units and bomb-jamming kits had “notable weakness,” he wrote.

CEO Steve Loranger responded that ITT remains on track and confident about acquisitions and its growing cyber-tech business lines. See the full ITT presentation here for more.