ITT Gets a Big Boost From Insurance, Finance
ITT Corp.’s profit climbed 64% in the third quarter because of improved results of its insurance and finance business, the New York-based conglomerate reported.
ITT earned $126 million in the three months ended Sept. 30, up from $77 million a year earlier. Revenue rose 21% to $5.8 billion from a restated $4.8 billion.
For the first nine months of the year, ITT said its earnings rose 27% to $392 million, from $308 million in the same period of 1985. Revenue rose 22% to $17.1 billion from $14 billion a year earlier.
Results of Diversified Services, including Hartford Fire Insurance and its subsidiaries, improved substantially over the first nine months of 1985, reflecting continuation of favorable underwriting results at Hartford, ITT said.
Hartford’s domestic combined ratio, a key performance indicator in the industry, was 104.2% for the first nine months of 1986, an improvement of more than nine percentage points over the first nine months of 1985.
Telecommunications income during the nine months declined, primarily due to the absence of the 1985 gain on certain telecommunications contracts in Africa, the company said.
ITT also said that continuing improvement in several areas, including the North American Business Systems group and better operating performance in West Germany and the United Kingdom, was offset by continued excess capacity in Spain.
The defense and space group continued to perform well despite reduced income from certain contracts because of lower fiber cable sales, the company said.
“The sizable increase in our earnings for the third-quarter and nine-month periods reflects strong operating performance in our company,” said Rand Araskog, chairman and chief executive.
“The improved results at the Hartford continue to lead the way, and we expect this trend to continue for the remainder of the year. Our strong manufacturing base is supported by an order backlog which totalled $7.6 billion at Sept. 30, 1986. Excluding the effects of foreign exchange and divested units, backlog increased 9.1% from the same time last year,” he added.
Araskog said that through ITT’s impending joint venture with CGE of France, ITT will retain a significant presence in the worldwide telecommunications business.
“I am pleased to report that our intense efforts, together with the people of CGE, to complete our joint venture transaction by year-end are on schedule,” he said.
ITT also owns the Sheraton hotel chain, the Rayonier forest-products group, an industrial technology unit and other holdings.
