You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Today's call will cover ITT's financial results for the three months period ending July 3, announced yesterday evening.
These statements are not guarantees of future performance or events and are based on management's current expectations.
Actual results may vary materially, due to, among other items, the factors described in our 2020 Annual Report, on Form 10-K and other recent SEC filings.
These adjusted results exclude certain non-operating and non-recurring items, including but not limited to asbestos-related charges, restructuring, asset impairment, acquisition-related items and certain tax items.
Before we begin, I'll provide a brief overview of our second quarter GAAP results.
Revenue increased 34% to $692 million.
Segment operating income increased 206% [Phonetic] to $114 million, which equates to segment operating margin of 16.5%.
Reported earnings per share decreased 15% to $0.45, driven primarily by a $28 million after-tax loss on the divestiture of InTelCo Management LLC, formerly a wholly owned subsidiary that holds legacy asbestos liabilities and related insurance assets, as well as prior-year income tax benefits, and increased corporate and environmental costs.
We are all focused on ensuring ITT delivers on its commitments hour after hour, while taking care of each other, our families, and our customers.
This has been a pivotal quarter for ITT.
On July 1, we divested a subsidiary that holds all of our legacy asbestos liabilities to a portfolio company of Warburg Pincus.
Importantly, ITT is indemnified from any further responsibility for all pending and future legacy asbestos claims.
This transaction follows the successful transfer of our U.S. pension liability in October 2020 and will allow us to focus more on growing the core business organically and through acquisitions.
We are now beginning the next chapter in ITT's history.
On the operational front, over the past few months, I've had the privilege of meeting our teams in person at our sites in Italy, California, the Netherlands, and the Northeast.
I continue to be encouraged by the progress we are making, by the opportunities that remain, and by the commitment and the passion I see from our workforce.
Before reviewing our results, let me talk a little bit about ITT's sustainability efforts.
In the coming weeks, we will be releasing our 2021 Sustainability Report Supplement, which will show our commitment to environmental, social, and governance initiatives.
It is clear that while we have made significant progress in 2020 despite the impact of the pandemic, there is still more that we can do.
Our employees' efforts during the pandemic to take care of each other and our customers have strengthened our resolve to continuously improve our ESG practices and this is what we will do.
Some of our accomplishments, which you can soon read about it in the supplement, include a 25% reduction in greenhouse gas emissions and a 25% reduction in workplace incidents.
Further, we maintained an A rating for our ESG profile, as measured by MSCI, a recognized leader in global ESG assessment.
Now, let's review our results for the second quarter, beginning with sales.
Friction continued to outperform global auto production growth.
In fact, the outperformance we drove this quarter was significantly above our historical average.
The auto businesses in MT grew organic revenue nearly 80% and MT's revenue exceeded pre-COVID levels from 2019 once again this quarter.
More importantly, we continue to win key awards in both conventional vehicles and our new electric vehicle platforms, which will fuel future outperformance.
This quarter we were awarded content on 10 new electric vehicle platforms, seven of which were in China and two on key strategic platforms in the growing North American market.
We also continue to differentiate ourselves from the competition.
In July, Friction's outer ceramic brake pads sold in the aftermarket were ranked the highest among five competitors according to ADAC, Europe's largest motoring association based in Germany.
This is a testament to the supplier excellence and innovation of the Friction team.
Let's get back to the quarter.
Building on the first quarter momentum, our connectors business in Connect and Control Technologies grew sales by 17% organically, after 8% organic in Q1.
We saw continued strength in the North American distribution channel; and sequentially, industrial connectors in Q2 grew 6% versus Q1, due to distribution strength worldwide.
We also drove 8% organic revenue growth in Industrial Process, driven by strong pump project deliveries, which were up 52% organically in the quarter due to strength in the chemical and oil and gas markets.
We achieved this by remaining focused on serving our customers and ensuring we commission their projects on time, despite significant supply chain disruptions.
Turning to orders, I'm energized by the growth our commercial teams generated this quarter across all three segments.
In total, we drove 47% organic orders growth across ITT with order levels surpassing 2019, positioning us well for the second half of the year and for 2022.
First, Motion Technologies grew orders by 76% organically, driven mainly by auto, and we also saw a strong performance in valve [Phonetic], which grew over 20% organically.
Second, in Industrial Process, orders were up 18% organically and up 7% sequentially, driven by continued recovery in our short-cycle business, where orders grew 24% across parts, valves and service.
Our pump project orders were relatively flat year-over-year.
However, we are increasingly confident that project activity in the funnel is strengthening and we expect to successfully leverage this momentum in the second half.
Finally, in CCT, orders were up 47% organically, driven largely by industrial connectors and aerospace components.
As we mentioned last quarter, we saw some positive signs in commercial aerospace, which we expect it will start to pick up in Q2, and we are seeing the momentum in orders today.
From a profitability perspective, despite increasing pressure from commodity costs and supply chain disruptions, we delivered nearly 400 basis points of adjusted segment margin expansion, with triple-digit margin expansion in each segment.
This was a result of the incredible growth in volumes, I mentioned earlier, and the team's ability to generate productivity, net of inflation, while successfully navigating challenging market conditions.
This was aided in part by the actions we took in 2020 to reduce our structural costs.
As a result of the revenue growth and margin expansion, ITT delivered adjusted earnings per share of $0.94, growing 65% and surpassing our pre-COVID adjusted earnings per share levels in Q2 2019.
Given the strong first-half performance and our confidence in ITT's ability to outperform, we are again raising our outlook for 2021.
We now anticipate organic revenue growth will be 8% to 10% for the year, a 300 basis point increase on both the low- and high-end of our already increased guidance from the first quarter.
These will be driven by the strength in Friction, and short-cycle orders growth in both IP and CCT.
The increased sales volume and strong productivity expected in 2021 will generate adjusted earnings per share in the range of $3.90 to $4.05 at the high end, which equates to 22% to 27% growth versus prior year.
This is an $0.08 improvement at the midpoint, after a $0.30 increase after the first quarter, and this puts ITT on pace to comfortably surpass 2018 adjusted earnings per share despite significant inflationary pressure.
From a top line perspective, Motion Technologies delivered a solid performance, driven by strong growth in the OE business and continued share gains despite the global chip shortage and supply chain disruptions.
Our Friction and Wolverine OE businesses grew over 60% organically.
As I always do, this quarter, I traveled to a number of our facilities, including our world-class friction plant in Barge, Italy.
Here, I saw the teams' engineering expertise on full display, which will enable us to continue winning an outsized share of global EV platforms.
Our continued investment in automation in all our plants and hour-by-hour management allows us to continuously meet customer demand, despite constantly changing production schedules; and we continue to invest in and develop new technologies to address the needs of a new and more environmentally friendly automotive braking system.
In CCT, we drove nearly 19% organic revenue growth in industrial connectors, mainly through distribution, continuing the momentum we saw in the first quarter.
Demand in commercial aerospace is increasing, exhibited by the nearly 70% growth in aerospace orders.
The book to bill in CCT was an impressive 1.18 for the quarter, which positions us well for the future.
Now, moving to operating margins.
Our focus on operational excellence produced 250 basis points of expansion in Q2 at the ITT level and 390 basis points at the segment level.
By segment, MT grew margin 660 basis points, Connect and Control 230 basis points with an incremental margin of 37%, and Industrial Process grew margin 100 basis points to nearly 15% once again.
The strong performance was a combination of higher sales volume, commercial actions and productivity, offset by raw material inflation and unfavorable mix, given the growth in pump projects and continued investments for growth, which are critical to sustain ITT's outperformance.
Regarding raw materials' inflation, the impact this quarter was approximately 240 basis points, which was higher than what we expected.
And while we are deploying pricing actions with our customers, based on current prices for material purchases for the remainder of 2021, we expect this phenomenon will have a significant impact in the second half.
Free cash flow for the quarter was impacted by the sale of our legacy asbestos liabilities.
Excluding this one-time non-recurring item, adjusted free cash flow was $131 million.
The decline compared to prior year was the result of higher operating income generation in the segments that was more than offset by strategic investments in working capital to support growing customer demand.
Wrapping up, our ITTans [Phonetic] around the world delivered another outstanding performance in Q2.
Organic growth was strong across all three segments and we converted to higher sales at good margins.
We generated over 400 basis points of productivity while investing for future growth and successfully navigated challenging market conditions; and our nearly 50% organic growth in orders position ITT for a strong second half.
Motion Technologies' Q2 organic revenue growth of 64% was primarily driven by strength in auto.
As you know, the second quarter of last year was down significantly, due to the pandemic.
However, Friction continued to outperform global auto production by a very wide margin.
And from an operating standpoint, our OE business performed very well, with 99%-plus on-time performance.
This was a key reason MT's revenue eclipsed pre-COVID levels in the second quarter of 2019 by 8%.
The strong orders growth in MT, this quarter, was a combination of both auto and valve, where we continue to gain share.
Segment margin expanded 660 basis points versus prior year to 18.8%, mainly due to higher volumes and productivity, offset by the impact of higher raw material costs for steel, tin, and copper.
As we indicated last year, MT's margins declined sequentially in the second quarter, given the increasing commodities pressure.
However, MT delivered almost 30% incremental margin, in spite of these headwinds.
Wolverine sales growth was over 60%, driven by OE shims in North America and Europe, and in sealings, while KONI grew by double digits organically.
Margins in Wolverine, KONI and Axtone were all double digits in the quarter.
For Industrial Process, revenue was up 8% organically.
This was driven partially by an easy prior-year comparison, stemming from steep declines in project shipments, which resulted in over 50% revenue growth this quarter.
We also saw minor short-cycle declines, driven by lower service sales and flat growth in baseline pumps, due to the materials' shortage.
As we have indicated, given the order trends we see across IP, we continue to expect the short-cycle businesses to accelerate in the second half.
From an end market perspective, growth was spread across general industrial, oil and gas, and chemical markets.
IP grew 18% organically and 7% sequentially, due to the short cycle; namely, parts, valves and service.
Our daily order rates continue to be strong into the third quarter.
Orders in all product categories, except baseline pumps, were above 2019 levels, and the month of June was our largest month of project orders since 2015.
We believe this positions us well for the remainder of 2021.
IP's margin expanded 100 basis points to 14.7%, with an incremental margin of 24%.
This was partially impacted by unfavorable mix, given the higher proportion of project versus short-cycle sales.
We expect the mix to improve from here as short cycle continues to recover.
Lastly, in Connect and Control Technologies, we continued to turn the corner with incremental margins of 37% this quarter.
This was the result of continued volume leverage and strong productivity, despite inflationary headwinds and continued declines in commercial aerospace, while OE production continues to improve our largest aerospace customers and managing through elevated inventory levels on key platforms which will delay a significant recovery in aero components demand until 2022.
Similar to the rest of ITT, orders growth was incredibly strong, driven by our connector business, with continued North American distribution strength and growth in aerospace OE and aftermarket.
The book to bill was largely above 1 and backlog was up 16% compared to year-end 2020, which again position us well heading into 2022.
Before we move on, just a few additional comments on earnings per share for the quarter.
As you can see on the Q2 adjusted earnings per share walk on Slide 11, the year-over-year comparisons were negatively impacted by prior-year benefits, related to environmental, temporary cost actions, and CARES Act credits.
Partially offsetting these items was a roughly $0.03 benefit from foreign currency, consistent with our outlook, and a roughly $0.01 benefit from a lower-than-planned effective tax rate of 21.5%.
On July 1, ITT divested 100% of its equity of a subsidiary that holds legacy asbestos liabilities and related insurance assets to Delticus, a portfolio company of Warburg Pincus.
At closing, ITT contributed $398 million in cash and Delticus contributed $60 million in cash to InTelCo.
As a result of the transaction, ITT removed all asbestos obligations, related insurance assets, and associated deferred tax assets from our consolidated balance sheet as of the second quarter.
The benefits of this transaction include the indemnification for all legacy asbestos liabilities and stronger free cash flow generation in the absence of asbestos-related payments that we previously estimated at $20 million to $30 million per year on average over the next 10 years, prior to the divestiture.
Additionally, the transaction freeze up management time and resources to focus more on growing the core business and executing other more strategic initiatives, including ESG and M&A.
Coupled with our successful U.S. pension plans transfer executed in October 2020, we are well positioned to grow with a flexible balance sheet and without the risks and uncertainty of managing these legacy liabilities.
As we saw in Friction's results, global auto production is increasing, albeit constrained by the global semiconductor shortage which is causing inventory levels to remain low.
And while we expect demand will remain strong throughout 2021, the impact of higher raw material prices will weigh on margins and adjusted earnings per share during the second half.
The growth we're seeing in IP orders is mainly in short cycle.
On projects, however, we continue to expect the large project spend, particularly in oil and gas, will not fully recover until 2022.
In the meantime, we're seeing continued momentum in weekly run rates in our short-cycle businesses in Industrial Process and connectors, which we believe will drive organic revenue growth to a new range of 8% to 10% for the year.
Our assumption regarding commercial aerospace is that a substantial recovery will not occur until early 2022, given the level of inventory at our largest OE customers.
However, we see encouraging signs in orders, as production levels continue to increase.
Our outlook for adjusted segment margin remains at approximately 17.1% at the midpoint.
We expect a pronounced impact from raw material inflation, mainly in Motion Technologies.
However, our teams are driving commercial actions and additional productivity to minimize the impact.
We're planning for raw materials to remain at these elevated levels throughout 2021.
As you will see on Slide 7, our revised guidance assuming the incremental impact from this trend will be $0.09 at the high-end for the remainder of 2021.
Our revised adjusted earnings per share guidance reflects an $0.08 improvement at the midpoint of our range, eclipsing 2019 levels and our previous high end.
The net impact of all other items is roughly $0.01 benefit to full-year adjusted EPS, including a slightly lower-than-planned effective tax rate.
Foreign currency and other items will be a minor benefit, compared to our previous guidance.
And we continue to expect a 1% reduction in the weighted average share count, given our share repurchases to date.
Additionally, we are raising our adjusted free cash flow guidance by $5 million at the low- and high-ends of our previous range to reflect the higher operating income generated in the first half, offset by further working capital investments to support future growth, especially given the supply chain disruptions we are experiencing today.
In summary, we are again raising our outlook for 2021 across sales, earnings and free cash flow.
And with this raise, we now expect to eclipse 2019 levels in terms of adjusted segment margin and adjusted earnings per share.
As you can see, the majority of the improvement in adjusted earnings per share is operational in nature.
The higher volumes will likely be partially offset by incremental headwinds from rising raw material costs, which we have already discussed; the remaining changes to our outlook are rather immaterial.
From an end market perspective, the trends we saw in the second quarter have remained largely consistent throughout July.
Auto and the short cycle businesses in IP continue to perform well and CCT remains comfortably on path to recovery from both a sales and margin perspective.
On the other hand, our outlook reflects increased commodity pressure and we do not see any near-term improvements related to the supply chain.
Organic sales growth is expected to be in the mid-teens range, driven by growth across the portfolio and led by MP's strong performance.
IP and CCT should both improve to approximately high-single-digit organic growth, driven by short cycle.
Segment margin should be approximately flat sequentially to Q2 and above prior year, even with the significant raw material headwinds we anticipate primarily in MT. This negative impact on MT's margin will largely be offset by margin improvements in CCT, followed by Industrial Process.
Despite the margin challenges in Q3, we still expect all three businesses to be up over 100 basis points for the full year, which will eclipse ITT's segment margin for 2019.
The combined impact of higher sales and strong productivity will drive adjusted earnings-per-share growth in the low- to mid-teens.
With that, let me pass it back to Luca for closing remarks.
ITT continues to execute on its strategic priorities to position the company for long-term success.
The actions we took to eliminate our legacy asbestos liabilities will allow our teams to drive better growth in the core and up our game in capital deployment.
We are now even more laser-focused on growing ITT organically and through acquisitions while funding high-return growth investments, given our capital flexibility and strengthened cash flow profile.
We continue to outperform across all our businesses and we see encouraging signs in our orders growth, which will position us well for the remainder of 2021, 2022 and beyond, and simultaneously [Phonetic] continue to drive strong cash generation through increased income and effective working capital management.
The second half of 2021 will be challenging, given the supply chain disruptions, commodities pressure and emergence of COVID variant around the world.
However, I'm confident in ITT's ability to navigate these headwinds effectively, and drive growth and profitability, while leveraging our optimized cost structure and doing it all in a safe sustainable and efficient manner.
Crystal, please open the line for Q&A.

user
itt q2 earnings per share $0.45.
q2 earnings per share $0.45.
sees fy adjusted earnings per share $3.90 to $4.05.
q2 adjusted earnings per share $0.94 excluding items.

assistant