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Ingersoll Rand (IR) to Post Q1 Earnings: What's in the Cards?

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Ingersoll Rand Inc. (IR - Free Report) is scheduled to release first-quarter 2022 results on May 4, after market close.

IR’s earnings surpassed estimates in each of the last four quarters, the average being 18.9%. Its fourth-quarter 2021 earnings of 68 cents per share surpassed the Zacks Consensus Estimate of 61 cents by 11.5%.

Zacks Investment Research
Image Source: Zacks Investment Research

In the past three months, the stock has lost 19.2% compared with the industry’s decline of 12.2%.

Factors at Play

Ingersoll Rand is expected to have benefited from a solid product portfolio, innovation capabilities and its focus on boosting aftermarket businesses in the first quarter of 2022. Its presence in several end markets, including mining and construction, transportation, energy and industrial manufacturing, and others are anticipated to have driven its performance in the to-be-reported-quarter. Also, robust demand for IR’s blowers and vacuum pumps coupled with strength across its dosatron, speciality and medical businesses, might have been beneficial in the first quarter.

However, over time, the escalating cost of sales and operating expenses have been a concern for IR. Ingersoll Rand’s cost of sales, and selling and administrative expenses increased 20.4% and 15.2% year over year, respectively, in the fourth quarter of 2021. Though pricing actions are expected to have been a relief, increasing price of materials and logistics along with the ongoing headwinds from growth investments might have adversely impacted IR’s performance in the March quarter.

Given Ingersoll Rand’s global presence, its operations are subject to foreign exchange risks, political and economic disruptions. IR's overseas business might have been hurt by a stronger U.S. dollar in the first quarter of 2022.

Ingersoll Rand’s acquisitions positively impacted its revenues by 6.3% in the fourth-quarter 2021, a trend that most likely continued in the to-be-reported quarter as well, given the strength across IR’s purchased businesses. Its acquisition of Houdstermaatschappij Jorc (February 2022) is steadily expanding the product offerings in its ITS segment. The buyout of Tuthill Pump Group last December has been strengthening Ingersoll Rand’s existing pumping solution offerings for a while. Also, its acquisitions of Air Dimensions Inc. (October 2021) and Seepex GmbH (September 2021) have been benefiting Ingersoll Rand so far by boosting its product portfolio and enhancing its technical and digital capabilities in the PST segment.

The consensus estimate for Ingersoll Rand's first-quarter total revenues is currently pegged at $1,295 million, suggesting a decrease of 5.5% from the year-ago quarter’s reported number.

Earnings Whispers

Our quantitative model predicts that a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to increase the odds of an earnings beat. But that is not the case here, as we will see below.

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

Earnings ESP: Ingersoll Rand has an Earnings ESP of 0.00%, as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 45 cents each.

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: Ingersoll Rand carries a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some companies worth considering as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.

Roper Technologies, Inc. (ROP - Free Report) has an Earnings ESP of +0.24% and a Zacks Rank #2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

ROP’s earnings surprise in the last four quarters was 2.03%, on average.Roper’s earnings estimates have increased 0.8% for 2022 in the past 60 days. The stock has lost 0.4% in the past three months.

Illinois Tool Works Inc. (ITW - Free Report) has an Earnings ESP of +0.62% and a Zacks Rank #3, currently. ITW delivered a trailing four-quarter earnings surprise of 3.7%, on average.

ITW’s earnings estimates have decreased 0.3% for 2022 in the past 60 days. Its shares have declined 17.2% in the past three months.

AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +0.93% and is Zacks #3 Ranked, currently. AGCO’s earnings surprise in the last four quarters was 56.7%, on average.

In the past 60 days, AGCO’s earnings estimates have dipped 0.7% for 2022. The stock has grown 11.5% in the past three months.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.