Ingersoll-Rand Hits New All-Time High as Q3 Earnings Beat Analysts

Andrew Klips |

Diversified industrial company Ingersoll-Rand plc (IR) on Friday topped analysts and its own earnings guidance in the third quarter, although restructuring and impairment expenses tapped into profits.

For the quarter ended September 30, Ireland-based Ingersoll reported revenue of $3.75 billion, up 4 percent from $3.6 billion in the year prior quarter.  Net earnings were $165.9 million, or 56 cents per share, compared to $321.6 million, or $1.03 per share in the third quarter last year.  The latest earnings were hit by $173 million, or 59 cents per share, in one-time charges related to restructuring from spinning-off its security business, impairment charges related to operations in Europe and a redemption premium charge for early debt retirement.  Excluding those items, adjusted earnings from continued operations were $1.16 per share, which included a 3-cent per share gain from a property sale, versus $1.08 per share last year.

Ingersoll had previously guided adjusted earnings in the range of $1.07 to $1.12 and revenue between $3.65 billion and $3.75 billion.

Wall Street was expecting adjusted earnings of $1.10 per share on revenue of $3.7 billion.

“We realized revenue growth and earnings per share above our guidance, and continued to deliver excellent operating leverage in the quarter,” said Michael W. Lamach, chairman and chief executive of Ingersoll, in a statement today.

Last December, Ingersoll laid out a plan to spin off its security business into a stand-alone unit called Allegion, which will make locks and locking systems for commercial and residential customers.  The spinoff is supposed to be done by the end of this year.

The strengthening housing market helped Ingersol, a maker of Trane furnaces and air conditioners and Thermo King refrigeration units, to name a few products in its catalog of offerings.  The Climate Solutions division increased by 4 percent compared to last year’s third quarter to $2.03 billion.

The Industrial Technologies unit, which provides services to increase efficiency and operations as well as products like air compressors, tools and utility vehicles, saw revenues increase 3 percent to $722 million, with declines in the Americas offset by gains in Europe.

During the third quarter, Ingersoll repurchased approximately 5 million shares for about $320 million as part of a $2 billion program approved by the board of directors in December 2012. The company expects to complete this repurchase program by the end of the first quarter of 2014.

Looking ahead, the company boosted the low end of its full-year guidance, now forecasting earnings from continuing operations between $3.55 to $3.60 per share and revenue of $14.3 billion to $14.4 billion.  It previously guided earnings of $3.50 to $3.60 a share and revenue of $14.2 billion to $14.4 billion.

Shares of IR have printed new all-time highs Friday morning with the upbeat report, hitting $68.33 shortly after the opening bell.  An hour into the session, shares have pulled back some, but are still holding gains of 5 percent at $66.90.  Heading into Friday, shares were up about 33 percent so far in 2013.

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Companies

Symbol Name Price Change % Volume
IR Ingersoll-Rand plc (Ireland) 78.00 2.49 3.30 2,179,804
SFBK Sfb Bancorp Inc Tn 31.40 0.00 0.00 0

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