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Industrial goods manufacturer Ingersoll-Rand Plc (IR - Free Report) reported relatively healthy third-quarter 2017 results with adjusted earnings from continuing operations of $1.44 per share compared with $1.41 in the year-earlier quarter. Adjusted earnings beat the Zacks Consensus Estimate by a penny.
The company’s GAAP earnings were $1.41 per share compared with $1.39 in the year-ago period. The year-over-year increase in earnings was primarily attributable to higher revenues.
Quarterly revenues were $3,670.5 million, up from $3,567.8 million in the year-ago quarter. Revenues, however, missed the Zacks Consensus Estimate of $3,707 million. Organic revenues improved 2% year over year. Organic revenues from North America were up 2% while that from International markets were up 1%.
Ingersoll-Rand PLC (Ireland) Price, Consensus and EPS Surprise
The Climate segment recorded sales of $2,939 million compared with $2,838 million in the year-ago quarter. The upside was driven by solid revenues from commercial and residential HVAC (heating, ventilation and air conditioning) businesses.
The Industrial segment reported revenues of $731 million in the quarter, up from $753 million in the prior-year quarter.
Margins
Operating margin was 13.8% compared with 14.3% in the year-ago quarter. Adjusted operating margin declined to 14.1% from 14.5% in the prior-year quarter. Adjusted operating margin for the Climate segment was 16.5% compared with 16.8% in the year-ago quarter. Adjusted operating margin for the Industrial segment was 12.7%, up from 11.8% in the year-ago quarter.
Balance Sheet and Cash Flow
As of Sep 30, 2017, cash and cash equivalents totaled $1,259 million while long-term debt was $2,955.9 million. Net cash from operating activities in the first nine months of the year was $873.2 million compared with $1,116.7 million in the prior-year period. Year to date, Ingersoll spent $1 billion on share buybacks and $318 million on dividends.
Outlook
Ingersoll reaffirmed its guidance for 2017. It expects adjusted earnings from continuing operations to be approximately $4.50, while revenues are expected to rise 4.5% year over year. Cash flow from operating activities is expected to be about $1.5 billion, while free cash flow is projected to be around $1.2 billion.
Altra Industrial has long-term earnings growth expectations of 8%. It has a positive earnings surprise history with an average of 17% in the trailing four quarters, comprehensively beating estimates in each.
IDEX has long-term earnings growth expectations of 11.5%.
Illinois Tool has long-term earnings growth expectations of 9%.
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Ingersoll (IR) Beats Q3 Earnings Estimates, Reaffirms View
Industrial goods manufacturer Ingersoll-Rand Plc (IR - Free Report) reported relatively healthy third-quarter 2017 results with adjusted earnings from continuing operations of $1.44 per share compared with $1.41 in the year-earlier quarter. Adjusted earnings beat the Zacks Consensus Estimate by a penny.
The company’s GAAP earnings were $1.41 per share compared with $1.39 in the year-ago period. The year-over-year increase in earnings was primarily attributable to higher revenues.
Quarterly revenues were $3,670.5 million, up from $3,567.8 million in the year-ago quarter. Revenues, however, missed the Zacks Consensus Estimate of $3,707 million. Organic revenues improved 2% year over year. Organic revenues from North America were up 2% while that from International markets were up 1%.
Ingersoll-Rand PLC (Ireland) Price, Consensus and EPS Surprise
Ingersoll-Rand PLC (Ireland) Price, Consensus and EPS Surprise | Ingersoll-Rand PLC (Ireland) Quote
Segmental Performance
The Climate segment recorded sales of $2,939 million compared with $2,838 million in the year-ago quarter. The upside was driven by solid revenues from commercial and residential HVAC (heating, ventilation and air conditioning) businesses.
The Industrial segment reported revenues of $731 million in the quarter, up from $753 million in the prior-year quarter.
Margins
Operating margin was 13.8% compared with 14.3% in the year-ago quarter. Adjusted operating margin declined to 14.1% from 14.5% in the prior-year quarter. Adjusted operating margin for the Climate segment was 16.5% compared with 16.8% in the year-ago quarter. Adjusted operating margin for the Industrial segment was 12.7%, up from 11.8% in the year-ago quarter.
Balance Sheet and Cash Flow
As of Sep 30, 2017, cash and cash equivalents totaled $1,259 million while long-term debt was $2,955.9 million. Net cash from operating activities in the first nine months of the year was $873.2 million compared with $1,116.7 million in the prior-year period. Year to date, Ingersoll spent $1 billion on share buybacks and $318 million on dividends.
Outlook
Ingersoll reaffirmed its guidance for 2017. It expects adjusted earnings from continuing operations to be approximately $4.50, while revenues are expected to rise 4.5% year over year. Cash flow from operating activities is expected to be about $1.5 billion, while free cash flow is projected to be around $1.2 billion.
Stocks to Consider
Ingersoll currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Altra Industrial Motion Corp. , IDEX Corporation (IEX - Free Report) and Illinois Tool Works Inc. (ITW - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Altra Industrial has long-term earnings growth expectations of 8%. It has a positive earnings surprise history with an average of 17% in the trailing four quarters, comprehensively beating estimates in each.
IDEX has long-term earnings growth expectations of 11.5%.
Illinois Tool has long-term earnings growth expectations of 9%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>