It has been about a month since the last earnings report for Ingersoll Rand (IR Quick QuoteIR - Free Report) . Shares have added about 6.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ingersoll due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Ingersoll Rand Q1 Earnings & Revenues Top Estimates

Ingersoll Rand Inc. reported better-than-expected first-quarter 2022 results, wherein earnings surpassed estimates by 8.9%, and sales beat the same by 3.2%.

Its adjusted quarterly earnings were 49 cents per share, reflecting growth of 25.6% from the year-ago quarter’s 39 cents. The bottom line surpassed the Zacks Consensus Estimate of 45 cents.

Revenue Details

In the quarter under review, Ingersoll Rand’s revenues of $1,337 million reflected growth of 18.4% from the year-ago quarter’s number. The increase was primarily attributable to organic revenue growth of 13.9%, a positive impact of 6.8% from acquisitions, partially offset by the adverse impact of 2.3% from movements in foreign currencies.

The company’s revenues surpassed the Zacks Consensus Estimate of $1,295 million.

Orders in the quarter totaled $1,629.9 million, increasing 25.3% from the year-ago quarter’s number.

It is worth noting here that the divested businesses of Specialty Vehicle Technologies and High Pressure Solutions have been classified as discontinued operations, beginning second-quarter 2021.

The company now reports revenues under two segments. A brief discussion of the quarterly results is provided below:

Industrial Technologies & Services generated revenues of $1,039.6 million, accounting for 77.7% of net revenues in the reported quarter. Sales increased 13.8% year over year on 14.4% growth in organic sales. Acquisitions contributed 1.5%, while movements in foreign currencies had a negative impact of 2.1%. The segment’s orders in the quarter grew 24%.

Precision & Science Technologies’ revenues totaled $289.8 million, representing 22.3% of net revenues in the quarter. On a year-over-year basis, the segment’s revenues increased 37.9%. Organic sales grew 11.5%. Acquisitions had a positive impact of 29.7%, while movements in foreign currencies had a negative impact of 3.3%. The segment’s orders were up 30.6%.

Margin Profile

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter increased 24.4% year over year to $303.6 million. Margins increased 110 basis points (bps) to 22.7%.

On a segmental basis, adjusted EBITDA margin increased 70 bps year over year to 23.8% for the Industrial Technologies & Services and contracted 260 bps to 28.6% for the Precision & Science Technologies.

Balance Sheet & Cash Flow

Exiting the first quarter of 2022, Ingersoll Rand had cash and cash equivalents of $1,990.2 million, decreasing from $2,109.6 million recorded in the last reported quarter. Long-term debt was $3,375.6 million, down 0.8% sequentially.

In the first three months of 2022, the company repaid $9.6 million of long-term debts and repurchased shares worth $101.1 million.

Its liquidity of $3.1 billion at the end of the first quarter comprised cash of $2 billion and credit under revolving facilities of $1.1 billion.

In the first three months of 2022, it generated net cash of $50.1 million from operating activities, decreasing 42.7% year over year. Capital expenditure totaled $17.9 million compared with $14.3 million in the year-ago quarter. Free cash flow decreased 56% to $32.2 million.

Outlook

For 2022, Ingersoll Rand anticipates year-over-year revenue growth of 11-13% (8-10% on an organic basis). Foreign currency translation is anticipated to hurt sales by 2% in 2022. Contribution from mergers/acquisitions is anticipated to be $225 million.

For the Industrial Technologies & Services segment, the company expects organic sales growth of 8-10%, while the same for the Precision & Science Technologies is anticipated to be 9-11%.

Adjusted EBITDA is anticipated to be $1.385-$1.425 billion for the year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, Ingersoll has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ingersoll has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Ingersoll belongs to the Zacks Manufacturing - General Industrial industry. Another stock from the same industry, Graco Inc. (GGG Quick QuoteGGG - Free Report) , has gained 3.8% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

Graco Inc. reported revenues of $494.29 million in the last reported quarter, representing a year-over-year change of +8.8%. EPS of $0.57 for the same period compares with $0.58 a year ago.

Graco Inc. is expected to post earnings of $0.68 per share for the current quarter, representing a year-over-year change of +9.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Graco Inc. Also, the stock has a VGM Score of D.