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Why Is Ingersoll (IR) Down 2.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Ingersoll Rand (IR - Free Report) . Shares have lost about 2.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ingersoll due for a breakout? 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 drivers.
Ingersoll Rand Q2 Earnings & Revenues Top Estimates
Ingersoll Rand Inc. reported better-than-expected second-quarter 2022 results, wherein earnings surpassed estimates by 2% and sales beat the same by 3.7%.
Its adjusted quarterly earnings were 50 cents per share, reflecting growth of 16.3% from the year-ago quarter’s 43 cents. The bottom line surpassed the Zacks Consensus Estimate of 49 cents.
Revenue Details
In the quarter under review, Ingersoll Rand’s revenues of $1,440 million reflected growth of 12.6% from the year-ago quarter’s number. The increase was primarily attributed to organic revenue growth of 12.8%, a positive impact of 5.2% from acquisitions, partially offset by the adverse impact of 5.4% from movements in foreign currencies.
IR’s revenues surpassed the Zacks Consensus Estimate of $1,389 million.
Orders in the quarter totaled $1,598.8 million, increasing 9.6% from the year-ago quarter’s number.
Ingersoll Rand now reports revenues under two segments. A brief discussion of the quarterly results is provided below:
Industrial Technologies & Services generated revenues of $1,150.5 million, accounting for 79.9% of net revenues in the reported quarter. Sales increased 9.8% year over year on 14.2% growth in organic sales. Acquisitions contributed 0.7%, while movements in foreign currencies had a negative impact of 5.1%. The segment’s orders in the quarter grew 6.4%.
Precision & Science Technologies’ revenues totaled $289.4 million, representing 20.1% of net revenues in the quarter. On a year-over-year basis, the segment’s revenues increased 25%. Organic sales grew 5.9%. Acquisitions had a positive impact of 25.7%, while movements in foreign currencies had a negative impact of 6.6%. The segment’s orders were up 24.7%.
Margin Profile
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter increased 15% year over year to $335 million. Margins increased 50 basis points (bps) to 23.3%.
On a segmental basis, adjusted EBITDA margin increased 70 bps year over year to 25.4% for Industrial Technologies & Services and contracted 390 bps to 26.8% for Precision & Science Technologies.
Balance Sheet & Cash Flow
While exiting the second quarter of 2022, Ingersoll Rand had cash and cash equivalents of $1,309.2 million, decreasing from $2,109.6 million recorded in the fourth quarter of 2021. Long-term debt was $2,725.7 million, down 19.9% from $3,401.8 million recorded in the fourth quarter of 2021.
In the first six months of 2022, Ingersoll Rand repaid $639.5 million of long-term debts and repurchased shares worth $253.7 million.
Its liquidity of $2.4 billion at the end of the second quarter comprised cash of $1.3 billion and credit under revolving facilities of $1.1 billion.
In the first six months of 2022, IR generated net cash of $236.2 million from operating activities, decreasing 0.6% year over year. Capital expenditure totaled $39.3 million compared with $25.9 million in the year-ago quarter. Free cash flow decreased 5.7% to $196.9 million.
Outlook
For 2022, Ingersoll Rand anticipates revenue growth of 11-13% from the year-ago reported figure. On an organic basis, revenues are predicted to grow at an 11–13% rate compared with 8-10% anticipated earlier. Revenues are predicted to grow at 8-10% in the second half of the year. Foreign currency translation is anticipated to hurt sales by 5% in 2022 compared with the 2% predicted earlier. Contribution from mergers/acquisitions is anticipated to be $225 million.
For the Industrial Technologies & Services segment, IR expects organic sales growth of 11–13% compared with the 8-10% predicted earlier. Organic sales growth for Precision & Science Technologies is anticipated to be 9-11%.
Adjusted EBITDA is anticipated to be $1,395-$1,425 million for the year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Ingersoll has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 has been net zero. Notably, Ingersoll has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Ingersoll (IR) Down 2.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Ingersoll Rand (IR - Free Report) . Shares have lost about 2.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ingersoll due for a breakout? 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 drivers.
Ingersoll Rand Q2 Earnings & Revenues Top Estimates
Ingersoll Rand Inc. reported better-than-expected second-quarter 2022 results, wherein earnings surpassed estimates by 2% and sales beat the same by 3.7%.
Its adjusted quarterly earnings were 50 cents per share, reflecting growth of 16.3% from the year-ago quarter’s 43 cents. The bottom line surpassed the Zacks Consensus Estimate of 49 cents.
Revenue Details
In the quarter under review, Ingersoll Rand’s revenues of $1,440 million reflected growth of 12.6% from the year-ago quarter’s number. The increase was primarily attributed to organic revenue growth of 12.8%, a positive impact of 5.2% from acquisitions, partially offset by the adverse impact of 5.4% from movements in foreign currencies.
IR’s revenues surpassed the Zacks Consensus Estimate of $1,389 million.
Orders in the quarter totaled $1,598.8 million, increasing 9.6% from the year-ago quarter’s number.
Ingersoll Rand now reports revenues under two segments. A brief discussion of the quarterly results is provided below:
Industrial Technologies & Services generated revenues of $1,150.5 million, accounting for 79.9% of net revenues in the reported quarter. Sales increased 9.8% year over year on 14.2% growth in organic sales. Acquisitions contributed 0.7%, while movements in foreign currencies had a negative impact of 5.1%. The segment’s orders in the quarter grew 6.4%.
Precision & Science Technologies’ revenues totaled $289.4 million, representing 20.1% of net revenues in the quarter. On a year-over-year basis, the segment’s revenues increased 25%. Organic sales grew 5.9%. Acquisitions had a positive impact of 25.7%, while movements in foreign currencies had a negative impact of 6.6%. The segment’s orders were up 24.7%.
Margin Profile
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter increased 15% year over year to $335 million. Margins increased 50 basis points (bps) to 23.3%.
On a segmental basis, adjusted EBITDA margin increased 70 bps year over year to 25.4% for Industrial Technologies & Services and contracted 390 bps to 26.8% for Precision & Science Technologies.
Balance Sheet & Cash Flow
While exiting the second quarter of 2022, Ingersoll Rand had cash and cash equivalents of $1,309.2 million, decreasing from $2,109.6 million recorded in the fourth quarter of 2021. Long-term debt was $2,725.7 million, down 19.9% from $3,401.8 million recorded in the fourth quarter of 2021.
In the first six months of 2022, Ingersoll Rand repaid $639.5 million of long-term debts and repurchased shares worth $253.7 million.
Its liquidity of $2.4 billion at the end of the second quarter comprised cash of $1.3 billion and credit under revolving facilities of $1.1 billion.
In the first six months of 2022, IR generated net cash of $236.2 million from operating activities, decreasing 0.6% year over year. Capital expenditure totaled $39.3 million compared with $25.9 million in the year-ago quarter. Free cash flow decreased 5.7% to $196.9 million.
Outlook
For 2022, Ingersoll Rand anticipates revenue growth of 11-13% from the year-ago reported figure. On an organic basis, revenues are predicted to grow at an 11–13% rate compared with 8-10% anticipated earlier. Revenues are predicted to grow at 8-10% in the second half of the year. Foreign currency translation is anticipated to hurt sales by 5% in 2022 compared with the 2% predicted earlier. Contribution from mergers/acquisitions is anticipated to be $225 million.
For the Industrial Technologies & Services segment, IR expects organic sales growth of 11–13% compared with the 8-10% predicted earlier. Organic sales growth for Precision & Science Technologies is anticipated to be 9-11%.
Adjusted EBITDA is anticipated to be $1,395-$1,425 million for the year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Ingersoll has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 has been net zero. Notably, Ingersoll has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.