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Ingersoll Rand (IR) Q2 Earnings & Revenues Top Estimates
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Ingersoll Rand Inc. (IR - Free Report) 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%.
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.
Zacks Rank & Stocks to Consider
Ingersoll Rand currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the industrial products sector are discussed below:
GEF’s earnings estimates have increased 17.8% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 22.7% in the past six months.
Titan International, Inc. presently flaunts a Zacks Rank of 1. Its earnings surprise in the last four quarters was 47%, on average.
In the past 60 days, TWI’s earnings estimates have increased 43.3% for 2022. The stock has surged 46.4% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 13.7%, on average.
In the past 60 days, Valmont’s earnings estimates have increased 3.8% for 2022. The stock has rallied 29% in the past six months.
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Ingersoll Rand (IR) Q2 Earnings & Revenues Top Estimates
Ingersoll Rand Inc. (IR - Free Report) 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%.
Ingersoll Rand Inc. Price and Consensus
Ingersoll Rand Inc. price-consensus-chart | Ingersoll Rand Inc. Quote
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.
Zacks Rank & Stocks to Consider
Ingersoll Rand currently carries a Zacks Rank #3 (Hold). 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). GEF delivered a trailing four-quarter earnings surprise of 22.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
GEF’s earnings estimates have increased 17.8% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 22.7% in the past six months.
Titan International, Inc. presently flaunts a Zacks Rank of 1. Its earnings surprise in the last four quarters was 47%, on average.
In the past 60 days, TWI’s earnings estimates have increased 43.3% for 2022. The stock has surged 46.4% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 13.7%, on average.
In the past 60 days, Valmont’s earnings estimates have increased 3.8% for 2022. The stock has rallied 29% in the past six months.