UPDATE 2-ITT Corp profit raises

ATLANTA, Feb 3 (Reuters) - ITT Corp (ITT.N) reported a higher fourth-quarter profit on Wednesday as cost cuts helped offset lower revenue, and the provider of military equipment and water pumps lifted its full-year 2010 outlook. The supplier of night-vision goggles for defense and industrial water pumps said recent order trends were picking up in some markets and that it expected "substantial benefits" from the overhaul of its defense business announced last month. [ID:nN05202580] But because of the realignment's costs, the company gave a first-quarter outlook below Wall Street estimates. Over the past year, ITT has cut commercial business staff, moved more work to lower-cost areas and implemented merit pay freezes to reduce costs. Fourth-quarter net income rose to $199.2 million, or $1.08 a share, from $185.5 million, or $1.01 a share, a year earlier. Excluding items, the company said its profit for the latest period was 97 cents a share. Analysts expected 93 cents, according to Thomson Reuters I/B/E/S. Revenue fell about 3 percent to $2.87 billion, compared with the analysts' average estimate of $2.88 billion, while total costs and expenses fell 4 percent. Sales in the defense business, ITT's biggest segment, fell 1 percent to $1.6 billion as lower tactical radio sales offset growth in service contracts and international night-vision goggle revenues. Revenue fell 6 percent in the fluid technology segment and increased 2 percent in the motion and flow control segment, which supplies aerospace, automotive and industrial markets. The company said its wastewater pump business was seeing an uptick in municipal treatment and transport, driven by international demand. While the company expects its aerospace business to remain under pressure, it said it saw signs of stability in connectors and general industrial markets. ITT expects 2010 earnings of $3.90 to $4.10 a share, compared with a prior forecast of $3.85 to $4.05. Analysts on average expected $4.01. For the first quarter, ITT said it expected profit of 73 cents to 75 cents a share on higher restructuring expenses tied to the defense business overhaul. Analysts expected 82 cents.