Ingersoll Rand Inc. (IR - Free Report) reported second-quarter 2023 adjusted earnings of 65 cents per share, which beat the Zacks Consensus Estimate of earnings of 54 cents per share. The bottom line increased 30% year over year.
Total revenues of $1,686.5 million outperformed the consensus estimate of $1,581 million. The top line increased 17.1% year over year on a 12.4% rise in organic revenues. Acquisitions contributed 5.9% to revenues while foreign currency movements had an adverse impact of 1.2%.
Orders in the quarter totaled $1,737.4 million, up 8.7% from the year-ago quarter. Organically orders increased 4.6%.
Segmental Discussion
The Industrial Technologies & Services segment generated revenues of $1,378.4 million, accounting for 81.7% of net revenues in the reported quarter. Sales increased 19.8% year over year on 14.4% growth in organic sales. Acquisitions contributed 6.8% while movement in foreign currencies had a negative impact of 1.4%. The segment’s orders in the quarter were up 12.8% (up 8.2% organically). Adjusted EBITDA increased 29.3% year over year to $377.5 million. Our estimate for adjusted EBITDA was $319.3 million.
The Precision & Science Technologies segment’s revenues totaled $308.1 million, representing 18.3% of net revenues in the quarter. Our estimate for segmental revenues was $298.5 million. On a year-over-year basis, the segment’s revenues increased 6.5%. Organic sales grew 4.6%. Acquisitions had a positive impact of 2.5% while movement in foreign currencies had a negative impact of 0.6%. The segment’s orders were down 7.9% (down 10.2% organically). Adjusted EBITDA increased 15.8% year over year to $90.0 million. Our estimate for adjusted EBITDA was $88.9 million.
Margin Profile
In the quarter under review, IR's cost of sales increased 13.4% year over year to $989.0 million. Selling and administrative expenses increased 14.5% to $315.6 million.
Adjusted EBITDA in the quarter increased 26.5% year over year to $467.5 million. The margin increased to 27.7% from 25.7% in the year-ago period.
On a segmental basis, the adjusted EBITDA margin increased 200 basis points (bps) year over year to 27.4% for the Industrial Technologies & Services segment. The same increased 240 bps to 29.2% for the Precision & Science Technologies segment.
Balance Sheet & Cash Flow
While exiting the second quarter of 2023, Ingersoll Rand had cash and cash equivalents of $1,178.1 million, compared with $1,613.0 million recorded at the end of December 2022. Long-term debt (less of current maturities) was $2,698.5 million, compared with $2,716.1 million in December 2022.
In the first six months of 2023, this Zacks Rank #3 (Hold) company paid out dividends of $16.2 million and repurchased treasury stocks worth $132.8 million in the same time period.
In the same time period, IR generated net cash of $398.7 million from operating activities, up 68.8% year over year. Capital expenditure totaled $47.2 million, compared with $39.3 million in the year-ago quarter. Free cash flow increased 78.5% to $351.5 million.
2023 Outlook Revised
The company has raised its outlook for 2023. Ingersoll Rand now expects revenues to increase 12-14%, compared with 10-12% predicted earlier. Organic revenues are estimated to increase 8-10%, compared with 6-8% predicted before. The Industrial Technologies & Services segment’s revenues are predicted to increase 9-11% organically, compared with 6-8% expected earlier. The Precision & Science Technologies segment’s revenues are forecasted to climb 5-7% organically. Adverse foreign currency movements are expected to have no impact on total revenues.
Adjusted EBITDA is expected to be $1,690-$1,740 million, indicating an increase of 18-21% year over year, compared with $1,660-$1,710 million expected earlier. Adjusted earnings are anticipated to be $2.70-$2.80 per share, indicating an increase of 14-19% year over year. The midpoint of the guided range — $2.75 — lies above the Zacks Consensus Estimate of adjusted earnings of $2.70 per share. The company expected adjusted earnings of $2.64-$2.74 per share earlier.
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
GEF delivered a trailing four-quarter earnings surprise of 7.7%, on average. GEF’s earnings estimates have increased 13.4% for fiscal 2023 in the past 60 days. Its shares have risen 8.6% in the past year.
Caterpillar Inc. (CAT - Free Report) presently carries a Zacks Rank #2 (Buy). CAT’s earnings surprise in the last four quarters was 18.5%, on average.
In the past 60 days, estimates for Caterpillar’s earnings have increased 1.4% for 2023. The stock has gained 56.6% in the past year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Ingersoll Rand Inc. (IR - Free Report) reported second-quarter 2023 adjusted earnings of 65 cents per share, which beat the Zacks Consensus Estimate of earnings of 54 cents per share. The bottom line increased 30% year over year.
Total revenues of $1,686.5 million outperformed the consensus estimate of $1,581 million. The top line increased 17.1% year over year on a 12.4% rise in organic revenues. Acquisitions contributed 5.9% to revenues while foreign currency movements had an adverse impact of 1.2%.
Orders in the quarter totaled $1,737.4 million, up 8.7% from the year-ago quarter. Organically orders increased 4.6%.
Segmental Discussion
The Industrial Technologies & Services segment generated revenues of $1,378.4 million, accounting for 81.7% of net revenues in the reported quarter. Sales increased 19.8% year over year on 14.4% growth in organic sales. Acquisitions contributed 6.8% while movement in foreign currencies had a negative impact of 1.4%. The segment’s orders in the quarter were up 12.8% (up 8.2% organically). Adjusted EBITDA increased 29.3% year over year to $377.5 million. Our estimate for adjusted EBITDA was $319.3 million.
The Precision & Science Technologies segment’s revenues totaled $308.1 million, representing 18.3% of net revenues in the quarter. Our estimate for segmental revenues was $298.5 million. On a year-over-year basis, the segment’s revenues increased 6.5%. Organic sales grew 4.6%. Acquisitions had a positive impact of 2.5% while movement in foreign currencies had a negative impact of 0.6%. The segment’s orders were down 7.9% (down 10.2% organically). Adjusted EBITDA increased 15.8% year over year to $90.0 million. Our estimate for adjusted EBITDA was $88.9 million.
Margin Profile
In the quarter under review, IR's cost of sales increased 13.4% year over year to $989.0 million. Selling and administrative expenses increased 14.5% to $315.6 million.
Adjusted EBITDA in the quarter increased 26.5% year over year to $467.5 million. The margin increased to 27.7% from 25.7% in the year-ago period.
On a segmental basis, the adjusted EBITDA margin increased 200 basis points (bps) year over year to 27.4% for the Industrial Technologies & Services segment. The same increased 240 bps to 29.2% for the Precision & Science Technologies segment.
Balance Sheet & Cash Flow
While exiting the second quarter of 2023, Ingersoll Rand had cash and cash equivalents of $1,178.1 million, compared with $1,613.0 million recorded at the end of December 2022. Long-term debt (less of current maturities) was $2,698.5 million, compared with $2,716.1 million in December 2022.
In the first six months of 2023, this Zacks Rank #3 (Hold) company paid out dividends of $16.2 million and repurchased treasury stocks worth $132.8 million in the same time period.
In the same time period, IR generated net cash of $398.7 million from operating activities, up 68.8% year over year. Capital expenditure totaled $47.2 million, compared with $39.3 million in the year-ago quarter. Free cash flow increased 78.5% to $351.5 million.
2023 Outlook Revised
The company has raised its outlook for 2023. Ingersoll Rand now expects revenues to increase 12-14%, compared with 10-12% predicted earlier. Organic revenues are estimated to increase 8-10%, compared with 6-8% predicted before. The Industrial Technologies & Services segment’s revenues are predicted to increase 9-11% organically, compared with 6-8% expected earlier. The Precision & Science Technologies segment’s revenues are forecasted to climb 5-7% organically. Adverse foreign currency movements are expected to have no impact on total revenues.
Adjusted EBITDA is expected to be $1,690-$1,740 million, indicating an increase of 18-21% year over year, compared with $1,660-$1,710 million expected earlier. Adjusted earnings are anticipated to be $2.70-$2.80 per share, indicating an increase of 14-19% year over year. The midpoint of the guided range — $2.75 — lies above the Zacks Consensus Estimate of adjusted earnings of $2.70 per share. The company expected adjusted earnings of $2.64-$2.74 per share earlier.
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
GEF delivered a trailing four-quarter earnings surprise of 7.7%, on average. GEF’s earnings estimates have increased 13.4% for fiscal 2023 in the past 60 days. Its shares have risen 8.6% in the past year.
Caterpillar Inc. (CAT - Free Report) presently carries a Zacks Rank #2 (Buy). CAT’s earnings surprise in the last four quarters was 18.5%, on average.
In the past 60 days, estimates for Caterpillar’s earnings have increased 1.4% for 2023. The stock has gained 56.6% in the past year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Get the latest research report on CAT - FREE
Get the latest research report on IR - FREE
Get the latest research report on GEF - FREE