We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Ingersoll (IR) Down 4.4% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Ingersoll Rand (IR - Free Report) . Shares have lost about 4.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ingersoll due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Ingersoll Rand reported fourth-quarter 2022 adjusted earnings (excluding 18 cents from non-recurring items) of 72 cents per share, which beat the Zacks Consensus Estimate of 63 cents. The bottom line increased year over year.
Total revenues of $1,623.7 million outperformed the Zacks Consensus Estimate of $1,534.8 million. The top line increased 14.4% year over year on a 19.2% rise in organic revenues. Acquisitions contributed 2% to revenues, while foreign currency movements had an adverse impact of 6.8%. Orders in the quarter totaled $1,484 million, down 1% from the year-ago quarter. Organically orders increased 2%.
Segmental Discussion
Industrial Technologies & Services generated revenues of $1,315 million, accounting for 81% of net revenues in the reported quarter. Sales increased 17% year over year on 22% growth in organic sales. Acquisitions contributed 1.5%, while movement in foreign currencies had a negative impact of 7%. The segment’s orders in the quarter were down 1% (up 4% organically).
Precision & Science Technologies’ revenues totaled $308 million, representing 19% of net revenues in the quarter. On a year-over-year basis, the segment’s revenues increased 6%. Organic sales grew 9%. Acquisitions had a positive impact of 4.3%, while movement in foreign currencies had a negative impact of 6.5%. The segment’s orders were down 4% (2% organically).
Margin Profile
Adjusted EBITDA in the quarter increased 22.8% year over year to $420.2 million. Margin increased to 25.9% from 24.1% in the year-ago period.
On a segmental basis, the adjusted EBITDA margin increased 170 basis points (bps) year over year to 27.4% for Industrial Technologies & Services. The same increased 330 bps to 30.1% for Precision & Science Technologies.
Balance Sheet & Cash Flow
While exiting the fourth quarter of 2022, Ingersoll Rand had cash and cash equivalents of $1,613 million compared with $2,109.6 million recorded at the end of the year-ago period. Long-term debt (less current maturities) was $2,716.1 million compared with #3,401.8 million in the year-ago period.
In 2022, IR returned $294 million to shareholders through dividends and share buybacks.
In 2022, IR generated net cash of $865.4 million from operating activities, up 37.8% year over year. Capital expenditure totaled $94.6 million compared with $64.1 million in the year-ago quarter. Free cash flow increased 36.7% to $770.8 million.
2023 Outlook
For 2023, Ingersoll Rand expects revenues to increase 7-9%. Organic revenues are estimated to increase 3-5%. Industrial Technologies & Services revenues are predicted to increase 3-5% organically, while Precision & Science Technologies revenues are forecasted to climb 4-6% organically. Adverse foreign currency movements are expected to have an impact of 1% on total revenues.
Adjusted EBITDA is expected to be $1,570-$1,630 million, indicating an increase of 9-14% year over year. Adjusted earnings are anticipated to be $2.48-$2.58 per share, indicating an increase of 5-9%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Ingersoll has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Ingersoll has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Ingersoll (IR) Down 4.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Ingersoll Rand (IR - Free Report) . Shares have lost about 4.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ingersoll due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Ingersoll Rand Q4 Earnings & Revenues Surpass Estimates
Ingersoll Rand reported fourth-quarter 2022 adjusted earnings (excluding 18 cents from non-recurring items) of 72 cents per share, which beat the Zacks Consensus Estimate of 63 cents. The bottom line increased year over year.
Total revenues of $1,623.7 million outperformed the Zacks Consensus Estimate of $1,534.8 million. The top line increased 14.4% year over year on a 19.2% rise in organic revenues. Acquisitions contributed 2% to revenues, while foreign currency movements had an adverse impact of 6.8%. Orders in the quarter totaled $1,484 million, down 1% from the year-ago quarter. Organically orders increased 2%.
Segmental Discussion
Industrial Technologies & Services generated revenues of $1,315 million, accounting for 81% of net revenues in the reported quarter. Sales increased 17% year over year on 22% growth in organic sales. Acquisitions contributed 1.5%, while movement in foreign currencies had a negative impact of 7%. The segment’s orders in the quarter were down 1% (up 4% organically).
Precision & Science Technologies’ revenues totaled $308 million, representing 19% of net revenues in the quarter. On a year-over-year basis, the segment’s revenues increased 6%. Organic sales grew 9%. Acquisitions had a positive impact of 4.3%, while movement in foreign currencies had a negative impact of 6.5%. The segment’s orders were down 4% (2% organically).
Margin Profile
Adjusted EBITDA in the quarter increased 22.8% year over year to $420.2 million. Margin increased to 25.9% from 24.1% in the year-ago period.
On a segmental basis, the adjusted EBITDA margin increased 170 basis points (bps) year over year to 27.4% for Industrial Technologies & Services. The same increased 330 bps to 30.1% for Precision & Science Technologies.
Balance Sheet & Cash Flow
While exiting the fourth quarter of 2022, Ingersoll Rand had cash and cash equivalents of $1,613 million compared with $2,109.6 million recorded at the end of the year-ago period. Long-term debt (less current maturities) was $2,716.1 million compared with #3,401.8 million in the year-ago period.
In 2022, IR returned $294 million to shareholders through dividends and share buybacks.
In 2022, IR generated net cash of $865.4 million from operating activities, up 37.8% year over year. Capital expenditure totaled $94.6 million compared with $64.1 million in the year-ago quarter. Free cash flow increased 36.7% to $770.8 million.
2023 Outlook
For 2023, Ingersoll Rand expects revenues to increase 7-9%. Organic revenues are estimated to increase 3-5%. Industrial Technologies & Services revenues are predicted to increase 3-5% organically, while Precision & Science Technologies revenues are forecasted to climb 4-6% organically. Adverse foreign currency movements are expected to have an impact of 1% on total revenues.
Adjusted EBITDA is expected to be $1,570-$1,630 million, indicating an increase of 9-14% year over year. Adjusted earnings are anticipated to be $2.48-$2.58 per share, indicating an increase of 5-9%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Ingersoll has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Ingersoll has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.