WHITE PLAINS, N.Y. – ITT Industries Inc. said on Friday it will eliminate another 3,425 jobs because it expects the recession that has been hurting its electronic components division to last until 2003.
In a conference call, the defense systems and technology company said the job cuts, which follow 2,800 from earlier this year, are part of a restructuring that also involves the closing of five plants. The latest action will bring its work force to below 36,000, down about 15 percent from 42,000 at the beginning of the year.
The company said it will take a fourth-quarter charge of $100 million, or 72 cents a share, for the restructuring.
ITT said it is taking aggressive action because it does not expect the quick economic recovery that some economists have been projecting. Instead, the company said, the current recession is global and will probably not end until sometime in 2003.
Shares of ITT were down $1.34, or 2.7 percent, at $48.55 in afternoon New York Stock Exchange trade.
Most of the new job cuts -- 2,800 of them -- will come in ITT's electronic components division, which makes connectors and switches for such products as cell phones and industrial machinery, which the company said were especially hurt by the recession.
ITT said it plans to close two of the division's plants.
The company said its 2001 revenues will be 4 percent below last year due to the weak commercial electronics market.
ITT said it expects to report earnings of $3.07 to $3.11 a share for this year. Analysts surveyed by research firm Thomson Financial/First Call are expecting a profit of $3.07 to $3.12, for an average of $3.09.
For 2002, ITT forecast 2002 earnings of $3.45 to $3.65 a share, higher than Wall Street's estimates, which First Call said average $3.32 and range from $3.20 to $3.40. Revenues should be unchanged from or slightly lower than this year because of the weak economy, the company said.
But ITT said it expects growth in its defense division, which it said is experiencing a record backlog in orders.
In its conference call, the company said the adoption of FAS 142, the new accounting rules that are expected to benefit all companies results by changing the way they can account for goodwill, will boost its earnings by $36 million, or 39 cents per diluted share, in 2002.