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Ingersoll Rand Inc. (IR - Free Report) reported third-quarter 2023 adjusted earnings of 77 cents per share. The bottom line increased 24.2% year over year.
Total revenues of $1,738.9 million outperformed the consensus estimate of $1,689 million. The top line increased 14.7% year over year on a 6.4% rise in organic revenues. Acquisitions contributed 6.9% to revenues while foreign currency movements had a positive impact of 1.4%.
Orders in the quarter totaled $1,347 million, down 1% from the year-ago quarter. Organically orders decreased 9%.
Segmental Discussion
The Industrial Technologies & Services segment generated revenues of $1,428.4 million, accounting for 82.1% of net revenues in the reported quarter. Sales increased 19.1% year over year on 9.5% growth in organic sales.
Acquisitions contributed 8.2% while movement in foreign currencies had a positive impact of 1.4%. The segment’s orders in the quarter were down 0.6% (down 8.7% organically). Adjusted EBITDA increased 23.9% year over year to $ 410.9 million. Our estimate for adjusted EBITDA was $368.6 million.
The Precision & Science Technologies segment’s revenues totaled $310.5 million, representing 17.9% of net revenues in the quarter. Our estimate for segmental revenues was $351.9 million. On a year-over-year basis, the segment’s revenues decreased 1.8%. Organic sales declined 5.3%.
Acquisitions had a positive impact of 1.7% while movement in foreign currencies had a positive impact of 1.8%. The segment’s orders were down 2.8% (down 6% organically). Adjusted EBITDA increased 2.3% year over year to $94.2 million. Our estimate for adjusted EBITDA was $97.8 million.
Ingersoll Rand Inc. Price, Consensus and EPS Surprise
In the quarter under review, IR's cost of sales increased 6.3% year over year to $999.6 million. Selling and administrative expenses increased 13.1% to $315.2 million.
Adjusted EBITDA in the quarter increased 22.7% year over year to $461.5 million. The margin increased to 26.5% from 24.8% in the year-ago period.
On a segmental basis, the adjusted EBITDA margin increased 260 basis points (bps) year over year to 28.8% for the Industrial Technologies & Services segment. The same increased 120 bps to 30.3% for the Precision & Science Technologies segment.
Balance Sheet & Cash Flow
While exiting the third quarter of 2023, Ingersoll Rand had cash and cash equivalents of $1,197.5 million compared with $1,613.0 million recorded at the end of December 2022. Long-term debt (less of current maturities) was $2,699.3 million compared with $2,716.1 million in December 2022.
In the first nine months of 2023, the company paid out dividends of $24.3 million and repurchased treasury stocks worth $132.8 million in the same time period.
In the same time period, IR generated net cash of $796.0 million from operating activities, up 55.9% year over year. Capital expenditure totaled $75.8 million compared with $61.1 million in the year-ago quarter. Free cash flow increased 46% to $369 million.
2023 Outlook Revised
The company has raised its outlook for 2023. Ingersoll Rand now expects revenues to increase 14-16% compared with 12-14% predicted earlier. Organic revenues are estimated to increase 9-11% compared with 8-10% predicted before. The Industrial Technologies & Services segment’s revenues are predicted to increase 11-13% organically compared with 9-11% expected earlier. The Precision & Science Technologies segment’s revenues are forecasted to climb 1-3% organically. Adverse foreign currency movements are expected to have approximately 1% adverse impact on total revenues.
Adjusted EBITDA is expected to be $1,730 - $1,770 million, indicating an increase of 21-23% year over year, compared with $1,690-$1,740 million expected earlier. Adjusted earnings are anticipated to be $2.81-$2.89 per share, indicating an increase of 19-22% year over year. The Zacks Consensus Estimate of adjusted earnings is $2.76 per share. The company expected adjusted earnings to be $2.70-$2.80 per share earlier.
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:
AIT’s earnings estimates have increased 2.7% for fiscal 2024 (ending June 2024) in the past 60 days. Shares of Applied Industrial have risen 24.2% in the past year.
Axon Enterprise, Inc. (AXON - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of approximately 60.2%, on average.
In the past 60 days, estimates for Axon’s earnings have remained steady for 2023. The stock has soared 40.5% in the past year.
Caterpillar Inc. (CAT - Free Report) presently carries a Zacks Rank of 2. CAT’s earnings surprise in the last four quarters was 16.6%, on average.
In the past 60 days, estimates for Caterpillar’s 2023 earnings have increased 1.5%. The stock has gained 5.7% in the past year.
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Ingersoll Rand (IR) Q3 Earnings Rise 24.2% Y/Y, '23 View Up
Ingersoll Rand Inc. (IR - Free Report) reported third-quarter 2023 adjusted earnings of 77 cents per share. The bottom line increased 24.2% year over year.
Total revenues of $1,738.9 million outperformed the consensus estimate of $1,689 million. The top line increased 14.7% year over year on a 6.4% rise in organic revenues. Acquisitions contributed 6.9% to revenues while foreign currency movements had a positive impact of 1.4%.
Orders in the quarter totaled $1,347 million, down 1% from the year-ago quarter. Organically orders decreased 9%.
Segmental Discussion
The Industrial Technologies & Services segment generated revenues of $1,428.4 million, accounting for 82.1% of net revenues in the reported quarter. Sales increased 19.1% year over year on 9.5% growth in organic sales.
Acquisitions contributed 8.2% while movement in foreign currencies had a positive impact of 1.4%. The segment’s orders in the quarter were down 0.6% (down 8.7% organically). Adjusted EBITDA increased 23.9% year over year to $ 410.9 million. Our estimate for adjusted EBITDA was $368.6 million.
The Precision & Science Technologies segment’s revenues totaled $310.5 million, representing 17.9% of net revenues in the quarter. Our estimate for segmental revenues was $351.9 million. On a year-over-year basis, the segment’s revenues decreased 1.8%. Organic sales declined 5.3%.
Acquisitions had a positive impact of 1.7% while movement in foreign currencies had a positive impact of 1.8%. The segment’s orders were down 2.8% (down 6% organically). Adjusted EBITDA increased 2.3% year over year to $94.2 million. Our estimate for adjusted EBITDA was $97.8 million.
Ingersoll Rand Inc. Price, Consensus and EPS Surprise
Ingersoll Rand Inc. price-consensus-eps-surprise-chart | Ingersoll Rand Inc. Quote
Margin Profile
In the quarter under review, IR's cost of sales increased 6.3% year over year to $999.6 million. Selling and administrative expenses increased 13.1% to $315.2 million.
Adjusted EBITDA in the quarter increased 22.7% year over year to $461.5 million. The margin increased to 26.5% from 24.8% in the year-ago period.
On a segmental basis, the adjusted EBITDA margin increased 260 basis points (bps) year over year to 28.8% for the Industrial Technologies & Services segment. The same increased 120 bps to 30.3% for the Precision & Science Technologies segment.
Balance Sheet & Cash Flow
While exiting the third quarter of 2023, Ingersoll Rand had cash and cash equivalents of $1,197.5 million compared with $1,613.0 million recorded at the end of December 2022. Long-term debt (less of current maturities) was $2,699.3 million compared with $2,716.1 million in December 2022.
In the first nine months of 2023, the company paid out dividends of $24.3 million and repurchased treasury stocks worth $132.8 million in the same time period.
In the same time period, IR generated net cash of $796.0 million from operating activities, up 55.9% year over year. Capital expenditure totaled $75.8 million compared with $61.1 million in the year-ago quarter. Free cash flow increased 46% to $369 million.
2023 Outlook Revised
The company has raised its outlook for 2023. Ingersoll Rand now expects revenues to increase 14-16% compared with 12-14% predicted earlier. Organic revenues are estimated to increase 9-11% compared with 8-10% predicted before. The Industrial Technologies & Services segment’s revenues are predicted to increase 11-13% organically compared with 9-11% expected earlier. The Precision & Science Technologies segment’s revenues are forecasted to climb 1-3% organically. Adverse foreign currency movements are expected to have approximately 1% adverse impact on total revenues.
Adjusted EBITDA is expected to be $1,730 - $1,770 million, indicating an increase of 21-23% year over year, compared with $1,690-$1,740 million expected earlier. Adjusted earnings are anticipated to be $2.81-$2.89 per share, indicating an increase of 19-22% year over year. The Zacks Consensus Estimate of adjusted earnings is $2.76 per share. The company expected adjusted earnings to be $2.70-$2.80 per share earlier.
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:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank #2 (Buy) and a trailing four-quarter earnings surprise of 13.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
AIT’s earnings estimates have increased 2.7% for fiscal 2024 (ending June 2024) in the past 60 days. Shares of Applied Industrial have risen 24.2% in the past year.
Axon Enterprise, Inc. (AXON - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of approximately 60.2%, on average.
In the past 60 days, estimates for Axon’s earnings have remained steady for 2023. The stock has soared 40.5% in the past year.
Caterpillar Inc. (CAT - Free Report) presently carries a Zacks Rank of 2. CAT’s earnings surprise in the last four quarters was 16.6%, on average.
In the past 60 days, estimates for Caterpillar’s 2023 earnings have increased 1.5%. The stock has gained 5.7% in the past year.