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Ingersoll (IR) to Report Q2 Earnings: Is a Beat in Store?

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Ingersoll Rand Inc. (IR - Free Report) is scheduled to release second-quarter 2020 results on Aug 3, after market close.

The company surpassed estimates thrice and missed once in the last four quarters, the earnings surprise being 3.47%, on average. Its first-quarter 2020 earnings of 27 cents per share lagged the Zacks Consensus Estimate of 31 cents by 12.90%.

In the past three months, the company’s shares have gained 9.4% compared with the industry’s growth of 16%.

 

 

Factors at Play

Ingersoll Rand is likely to have benefited from its solid product portfolio, innovation capabilities and focus on increasing its aftermarket businesses in the second quarter. Also, a surge in the demand for the company’s medical products and solutions is likely to have supplemented its top-line performance in the to-be-reported quarter. Moreover, its focus on improving on-time delivery and leveraging on the supplier relationships might get reflected in the upcoming results.

Also, the company has exposure in various end markets — including industrial manufacturing, mining & construction, chemical, upstream energy, midstream energy, transportation, downstream energy and other. This is likely to have been beneficial in dealing with the coronavirus outbreak-led difficult times effectively.

In addition, in response to the coronavirus crisis, some of the actions taken by the company, including hiring freeze, furloughs, restricted discretionary spending and others, are anticipated to have helped it maintain a healthy margin performance.

However, the impacts of the pandemic on the demand for its products and services along with the governmental regulations imposed in response to the crisis are anticipated to get reflected in Ingersoll Rand’s second-quarter results. Moreover, given the company’s diverse geographic presence, its operations are subject to global economic and political risks as well as forex woes. For instance, unfavorable movements in foreign currencies adversely impacted sales by 1.4% in the first quarter of 2020. A stronger U.S. dollar might have hurt the company's overseas business in the second quarter as well.

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The case with Ingersoll Rand is given below:

Earnings ESP: The company has an Earnings ESP of +6.02% as the Most Accurate Estimate is pegged at 22 cents, higher than the Zacks Consensus Estimate of 21 cents.

Ingersoll Rand Inc. Price and EPS Surprise

 

Ingersoll Rand Inc. Price and EPS Surprise

Ingersoll Rand Inc. price-eps-surprise | Ingersoll Rand Inc. Quote

Zacks Rank: Ingersoll Rand carries a Zacks Rank #3, which when combined with a positive ESP, makes us confident of an earnings beat.

Conversely, we caution against stocks with a Zacks Ranks #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Other Key Picks

Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Deere Company (DE - Free Report) has an Earnings ESP of +4.64% and it currently sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alta Equipment Group Inc. (ALTG - Free Report) presently has a Zacks Rank #2 and an Earnings ESP of +36.84%.

Greif, Inc. (GEF - Free Report) currently has a Zacks Rank #3 and an Earnings ESP of +3.41%.

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