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Ingersoll Rand Inc. (IR - Free Report) reported better-than-expected third-quarter 2022 results, wherein earnings surpassed estimates by 5.1% and sales beat the same by 4.5%.
Its adjusted quarterly earnings were 62 cents per share, reflecting growth of 8.8% from the year-ago quarter’s 57 cents. This compares with our estimate of 60 cents. The bottom line surpassed the Zacks Consensus Estimate of 59 cents.
Revenue Details
In the quarter under review, Ingersoll Rand’s revenues of $1,515.7 million reflected growth of 14.4% from the year-ago quarter. The increase was primarily attributed to organic revenue growth of 13.8%, a positive impact of 3.8% from acquisitions, partially offset by the adverse impact of 7.1% from movement in foreign currencies.
IR’s revenues compare with our estimate of $1,455.7 million. The revenues surpassed the Zacks Consensus Estimate of $1,451 million.
Orders in the quarter totaled $1,654.5 million, increasing 10.5% from the year-ago quarter.
Ingersoll Rand reports revenues under two segments. A brief discussion of the quarterly results is provided below:
Industrial Technologies & Services generated revenues of $1,199.6 million, accounting for 79.1% of net revenues in the reported quarter. This compares with the Zacks Consensus Estimate of $1,142.7 million. Sales increased 12% year over year on 18.6% growth in organic sales. Acquisitions contributed 0.7%, while movement in foreign currencies had a negative impact of 7.3%. The segment’s orders in the quarter grew 10.1%.
Precision & Science Technologies’ revenues totaled $316.1 million, representing 20.9% of net revenues in the quarter. This compares with the Zacks Consensus Estimate of $313 million. On a year-over-year basis, the segment’s revenues increased 24.3%. Organic sales grew 15.4%. Acquisitions had a positive impact of 17.7%, while movement in foreign currencies had a negative impact of 8.8%. The segment’s orders were up 12.4%.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter increased 20% year over year to $376 million. Margins increased 110 basis points (bps) to 24.8%.
On a segmental basis, the adjusted EBITDA margin increased 70 bps year over year to 26.2% for Industrial Technologies & Services and contracted 60 bps to 29.1% for Precision & Science Technologies.
Balance Sheet & Cash Flow
While exiting the third quarter of 2022, Ingersoll Rand had cash and cash equivalents of $1,459.5 million, decreasing from $2,109.6 million recorded in the fourth quarter of 2021. Long-term debt was $2,720.1 million, down 20% from $3,401.8 million recorded in the fourth quarter of 2021.
In the first nine months of 2022, Ingersoll Rand repaid $647.1 million of long-term debt and repurchased shares worth $257.8 million.
The company’s liquidity of $2.6 billion at the end of the third quarter comprised cash of $1.5 billion and credit under revolving facilities of $1.1 billion.
In the first nine months of 2022, IR generated net cash of $510.6 million from operating activities, up 34.1% year over year. Capital expenditure totaled $61.1 million compared with $41.2 million in the year-ago quarter. Free cash flow increased 32.3% to $ 449.5 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 a 12-14% rate compared with 11-13% anticipated earlier. Foreign currency translation is anticipated to hurt sales by 6% in 2022 compared with the 5% predicted earlier. Contribution from mergers/acquisitions is anticipated at $225 million.
For the Industrial Technologies & Services segment, IR expects organic sales growth of 12-14% compared with 11-13% predicted earlier. Organic sales growth for Precision & Science Technologies is anticipated to be 10-12% compared with 9-11% expected earlier.
Adjusted EBITDA is anticipated to be $1,400-$1,425 million for the year compared with $1,395-$1,425 million predicted earlier.
Zacks Rank & Stocks to Consider
IR currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
EPAC’s earnings estimates have increased 9.1% for fiscal 2023 (ending August 2023) in the past 60 days. The company’s shares have gained 15.4% in the past six months.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank #1 and a trailing four-quarter earnings surprise of 24.8%, on average.
AIT’s earnings estimates have increased 3% for fiscal 2023 (ending June 2023) in the past 60 days. Its shares have risen 12.6% in the past six months.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2 (Buy). IEX’s earnings surprise in the last four quarters was 5.7%, on average.
In the past 60 days, IDEX’s earnings estimates have increased 1.5% for 2022. The stock has rallied 10.6% in the past six months.
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Ingersoll Rand (IR) Q3 Earnings & Revenues Surpass Estimates
Ingersoll Rand Inc. (IR - Free Report) reported better-than-expected third-quarter 2022 results, wherein earnings surpassed estimates by 5.1% and sales beat the same by 4.5%.
Its adjusted quarterly earnings were 62 cents per share, reflecting growth of 8.8% from the year-ago quarter’s 57 cents. This compares with our estimate of 60 cents. The bottom line surpassed the Zacks Consensus Estimate of 59 cents.
Revenue Details
In the quarter under review, Ingersoll Rand’s revenues of $1,515.7 million reflected growth of 14.4% from the year-ago quarter. The increase was primarily attributed to organic revenue growth of 13.8%, a positive impact of 3.8% from acquisitions, partially offset by the adverse impact of 7.1% from movement in foreign currencies.
IR’s revenues compare with our estimate of $1,455.7 million. The revenues surpassed the Zacks Consensus Estimate of $1,451 million.
Orders in the quarter totaled $1,654.5 million, increasing 10.5% from the year-ago quarter.
Ingersoll Rand reports revenues under two segments. A brief discussion of the quarterly results is provided below:
Industrial Technologies & Services generated revenues of $1,199.6 million, accounting for 79.1% of net revenues in the reported quarter. This compares with the Zacks Consensus Estimate of $1,142.7 million. Sales increased 12% year over year on 18.6% growth in organic sales. Acquisitions contributed 0.7%, while movement in foreign currencies had a negative impact of 7.3%. The segment’s orders in the quarter grew 10.1%.
Precision & Science Technologies’ revenues totaled $316.1 million, representing 20.9% of net revenues in the quarter. This compares with the Zacks Consensus Estimate of $313 million. On a year-over-year basis, the segment’s revenues increased 24.3%. Organic sales grew 15.4%. Acquisitions had a positive impact of 17.7%, while movement in foreign currencies had a negative impact of 8.8%. The segment’s orders were up 12.4%.
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 20% year over year to $376 million. Margins increased 110 basis points (bps) to 24.8%.
On a segmental basis, the adjusted EBITDA margin increased 70 bps year over year to 26.2% for Industrial Technologies & Services and contracted 60 bps to 29.1% for Precision & Science Technologies.
Balance Sheet & Cash Flow
While exiting the third quarter of 2022, Ingersoll Rand had cash and cash equivalents of $1,459.5 million, decreasing from $2,109.6 million recorded in the fourth quarter of 2021. Long-term debt was $2,720.1 million, down 20% from $3,401.8 million recorded in the fourth quarter of 2021.
In the first nine months of 2022, Ingersoll Rand repaid $647.1 million of long-term debt and repurchased shares worth $257.8 million.
The company’s liquidity of $2.6 billion at the end of the third quarter comprised cash of $1.5 billion and credit under revolving facilities of $1.1 billion.
In the first nine months of 2022, IR generated net cash of $510.6 million from operating activities, up 34.1% year over year. Capital expenditure totaled $61.1 million compared with $41.2 million in the year-ago quarter. Free cash flow increased 32.3% to $ 449.5 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 a 12-14% rate compared with 11-13% anticipated earlier. Foreign currency translation is anticipated to hurt sales by 6% in 2022 compared with the 5% predicted earlier. Contribution from mergers/acquisitions is anticipated at $225 million.
For the Industrial Technologies & Services segment, IR expects organic sales growth of 12-14% compared with 11-13% predicted earlier. Organic sales growth for Precision & Science Technologies is anticipated to be 10-12% compared with 9-11% expected earlier.
Adjusted EBITDA is anticipated to be $1,400-$1,425 million for the year compared with $1,395-$1,425 million predicted earlier.
Zacks Rank & Stocks to Consider
IR currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
Enerpac Tool Group Corp. (EPAC - Free Report) delivered an average four-quarter earnings surprise of 3.4%. EPAC presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
EPAC’s earnings estimates have increased 9.1% for fiscal 2023 (ending August 2023) in the past 60 days. The company’s shares have gained 15.4% in the past six months.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently has a Zacks Rank #1 and a trailing four-quarter earnings surprise of 24.8%, on average.
AIT’s earnings estimates have increased 3% for fiscal 2023 (ending June 2023) in the past 60 days. Its shares have risen 12.6% in the past six months.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2 (Buy). IEX’s earnings surprise in the last four quarters was 5.7%, on average.
In the past 60 days, IDEX’s earnings estimates have increased 1.5% for 2022. The stock has rallied 10.6% in the past six months.