ITT Corp shares up following 3-way split

1613

ITT Corp shares soared more than 21 percent one of the top percentage gainers on the New York Stock Exchange a day after the company spun off its water and defence businesses.

The spinoffs — defense company ITT Exelis and water company Xylem — were down 5.7 percent and 0.8 percent, respectively, amid the broader market sell-off.

Robert W. Baird & Co analyst Michael Halloran said the legacy ITT Corp, which now provides components for aerospace, rail, energy and other markets with estimated 2011 revenue of about $2 billion, had a “compelling” longer-term growth projectory, Reuters reports.

Post spin-offs, “ITT has become a high-quality and diversified industrial company with balanced cyclical exposure, attractive end markets (oil and gas, mining, aerospace, automotive), and a growing emerging market and aftermarket presence,” Halloran said in a note to clients on Tuesday.

The company spun off the defense and water management segments to take advantage of recovering commercial markets as global military spending comes under pressure.

A 1-for-2 reverse stock split, under which every two shares were converted into one common share of ITT Corp, was effective with the Oct. 31 market close.

Also on Tuesday, ITT Corp said it completed the acquisition of Blakers Pump Engineers, an Australia company that is a distributor for its Goulds Pumps industrial business.

ITT shares gained $3.20 to $18.32 in afternoon trading. ITT Exelis was down 61 cents at $10.69 and Xylem was off 24 cents at $26.50.