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Ingersoll Rand (IR) to Post Q2 Earnings: Is a Beat in the Cards?

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Ingersoll Rand Inc. (IR - Free Report) is scheduled to release second-quarter 2021 results on Jul 28, after market close.

The company’s earnings surpassed estimates in each of the last four quarters, the average surprise being 29.22%. Its first-quarter 2021 earnings of 45 cents per share surpassed the Zacks Consensus Estimate of 36 cents by 25.00%.

In the past six months, the stock has gained 19.1% compared with the industry’s growth of 11.9%.

Zacks Investment Research
Image Source: Zacks Investment Research

Factors at Play

Ingersoll Rand is likely to have benefited from its solid product portfolio, innovation capabilities and strength in aftermarket businesses in the second quarter. The company’s focus on investing in digital, IoT and e-commerce space is likely to have supplemented its performance in the second quarter.

Acquisitions made by the company positively impacted its revenues by 1.4% in first-quarter 2021, a trend which is likely to have continued in the to-be-reported quarter as well, given strength across its acquired businesses. The company’s acquisition of Tuthill Vacuum and Blower Systems (February 2021) has been strengthening its existing vacuum and blower product offerings. It acquired Albin Pump SAS in September 2020, which has been enhancing its pump and fluid technologies offerings.

The company’s exposure in several end markets — including industrial manufacturing, mining & construction, chemical, upstream energy, midstream energy, transportation and downstream energy — is also expected to have helped it in dealing with the coronavirus outbreak-led difficulties. Its company’s cost reduction actions are likely to have helped it maintain a solid margin in the quarter under review.

However, its divestment of Specialty Vehicle Technologies (June 2021) segment might have affected its top-line performance in the second quarter. Ingersoll Rand’s operations are also subject to global economic and political risks as well as forex woes, given its diverse geographic presence. This might have had a bearing on its performance.

The Zacks Consensus Estimate for the Industrial Technologies & Services segment's adjusted revenues is pegged at $977 million, suggesting a decline of 5% from the year-ago reported number but 6.9% improvement sequentially. The consensus estimate for Precision & Science Technologies segment’s revenues stands at $223 million, implying both year-over-year and sequential growth of 3.2%. The consensus mark for Specialty Vehicle Technologies segment’s revenues stands at $240 million, implying a 3% increase on a year-over-year basis, and no change sequentially.

The consensus estimate for the company’s second-quarter total revenues is currently pegged at $1,190 million, suggesting decrease of 5.9% and 13.1% year over year and sequentially, respectively. The consensus estimate for earnings of 40 cents suggests an improvement of 29% year over year but decline of 11.1% sequentially.

Earnings Whispers

According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

This is the case here as given below:

Earnings ESP: Ingersoll Rand has an Earnings ESP of +2.50%, as the Most Accurate Estimate is pegged at 41 cents, higher than the Zacks Consensus Estimate of 40 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: The company carries a Zacks Rank #3.

Key Picks

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

A. O. Smith Corporation (AOS - Free Report) has an Earnings ESP of +3.53% and it currently carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Colfax Corporation (CFX - Free Report) has an Earnings ESP of +1.50% and a Zacks Rank #2.

Eaton Corporation, plc (ETN - Free Report) has an Earnings ESP of +2.17% and Zacks Rank #2.