ITT Posts 4th-Quarter Profit in Reversal from a Year Ago

ITT Corp. said Wednesday it posted a $102-million profit in the fourth quarter, reversing a year-earlier loss caused by the company’s expensive decision to stop trying to make and sell digital phone switches in the United States.

For all of 1986, ITT earned $494 million despite the negative effect of the sale of its telecommunications operations to a French-controlled joint venture, Alcatel N. V., in which ITT holds a minority interest.

ITT, the New York-based conglomerate whose holdings include insurance and financial services, Sheraton hotels, timberland and factories, said its quarterly profit of $102 million contrasted with a loss of $15 million in the fourth quarter of 1985.

For 1986 as a whole, ITT’s $494-million profit was a 68% improvement over $294 million in 1985.

Revenue, restated to exclude discontinued operations, rose 14% in the fourth quarter to $4.8 billion from $4.2 billion.

Revenue for all of 1986 rose 19% to $17.4 billion from $14.7 billion a year earlier.

“Our 1986 operating performance was better than our expectations and reflects considerable strength throughout our product and service businesses,” Rand V. Araskog, ITT’s chairman and chief executive, said in a statement. He added: “We are confident that our earnings will continue to improve from this solid foundation.”

In 1986, ITT withdrew from its original core business of telecommunications through the sale of the business to Alcatel N. V., a joint venture under the control of France’s state-owned Cie. Generale d’Electricite. ITT received $1.25 billion in cash and transferred $800 million in debt onto the venture’s books.

ITT said the sale lessened fourth-quarter income by $98 million because a provision for U.S. taxes more than offset a “substantial” pretax gain.

The 1985 decision to withdraw from the digital switching business resulted in a $160-million charge against 1985’s fourth-quarter income from continuing operations.