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Ingersoll Rand (IR) Q4 Earnings & Revenues Top Estimates
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Ingersoll Rand Inc. (IR - Free Report) reported fourth-quarter 2023 adjusted earnings of 86 cents per share, surpassing the Zacks Consensus Estimate of 76 cents. The bottom line increased 19.4% year over year.
Total revenues of $1,821.4 million outperformed the consensus estimate of $1,755 million. The top line increased 12.2% year over year on a 3.8% rise in organic revenues. Acquisitions contributed 6.7% to revenues, while foreign currency movements had a positive impact of 1.7%.
Orders in the quarter totaled $1.67 billion, up 12.6% year over year. Organically, orders increased 3.4%.
Ingersoll Rand Inc. Price, Consensus and EPS Surprise
The Industrial Technologies & Services segment generated revenues of $1.51 billion, accounting for 82.8% of net revenues in the reported quarter. Sales increased 14.7% year over year on 4.8% growth in organic sales. Acquisitions contributed 8.3% while movement in foreign currencies had a positive impact of 1.6%. The segment’s organic sales in the quarter increased 4.8%. Our estimate for the segment’s sales was $1.41 billion.
Segmental orders in the quarter were up 15.6%. Adjusted EBITDA increased 25.7% year over year to $453.3 million. Our estimate for adjusted EBITDA was $391.7 million.
The Precision & Science Technologies segment’s revenues totaled $313 million, representing 17.2% of net revenues in the quarter. Our estimate for segmental revenues was $318.5 million. On a year-over-year basis, the segment’s revenues inched up 1.4%. Organic sales declined 0.4%, while movement in foreign currencies had a positive impact of 1.8%.
The segment’s orders were flat on a year-over-year basis. Adjusted EBITDA increased 1.5% year over year to $94.1 million. Our estimate for adjusted EBITDA was $97.1 million.
Margin Profile
In the quarter under review, IR's cost of sales increased 7.3% year over year to $1.04 billion. Selling and administrative expenses increased 19.9% to $330.8 million.
Adjusted EBITDA in the quarter increased 19.1% year over year to $500.5 million. The margin increased to 27.5% from 25.9% in the year-ago period.
Balance Sheet & Cash Flow
While exiting 2023, Ingersoll Rand had cash and cash equivalents of $1.60 billion compared with $1.61 billion at the end of December 2022. Long-term debt (less of current maturities) was $2.69 billion compared with $2.72 billion in December 2022.
In 2023, the company paid out dividends of $32.4 million and repurchased treasury stocks worth $263 million.
In 2023, IR generated net cash of $1.38 billion from operating activities, up 59.2% year over year. Capital expenditure totaled $105.4 million compared with $94.6 million in the year-ago quarter. Free cash flow increased 65% to $1.3 billion.
2024 Outlook
Ingersoll Rand expects revenues to increase 5-7% for 2024. Organic revenues are estimated to increase 2-4%. For both the Industrial Technologies & Services and Precision & Science Technologies segments, organic revenues are predicted to increase 2-4% from the year-ago levels. Foreign currency movements are expected to have approximately 1% positive impact on total revenues.
Adjusted EBITDA is expected in the $1.92-$1.98 billion band, indicating an increase of 7-11% from the prior-year levels. Adjusted earnings are anticipated in the range of $3.14-$3.24 per share, indicating an increase of 6-9% from the year-earlier actuals.
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.
Parker-Hannifin Corporation (PH - Free Report) presently carries a Zacks Rank #2 (Buy). PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 2.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Flowserve Corporation (FLS - Free Report) currently has a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has been unchanged.
Tetra Tech Inc. (TTEK - Free Report) presently has a Zacks Rank of 2. TTEK delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for Tetra Tech’s 2024 earnings has increased 2.9%.
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Ingersoll Rand (IR) Q4 Earnings & Revenues Top Estimates
Ingersoll Rand Inc. (IR - Free Report) reported fourth-quarter 2023 adjusted earnings of 86 cents per share, surpassing the Zacks Consensus Estimate of 76 cents. The bottom line increased 19.4% year over year.
Total revenues of $1,821.4 million outperformed the consensus estimate of $1,755 million. The top line increased 12.2% year over year on a 3.8% rise in organic revenues. Acquisitions contributed 6.7% to revenues, while foreign currency movements had a positive impact of 1.7%.
Orders in the quarter totaled $1.67 billion, up 12.6% year over year. Organically, orders increased 3.4%.
Ingersoll Rand Inc. Price, Consensus and EPS Surprise
Ingersoll Rand Inc. price-consensus-eps-surprise-chart | Ingersoll Rand Inc. Quote
Segmental Discussion
The Industrial Technologies & Services segment generated revenues of $1.51 billion, accounting for 82.8% of net revenues in the reported quarter. Sales increased 14.7% year over year on 4.8% growth in organic sales. Acquisitions contributed 8.3% while movement in foreign currencies had a positive impact of 1.6%. The segment’s organic sales in the quarter increased 4.8%. Our estimate for the segment’s sales was $1.41 billion.
Segmental orders in the quarter were up 15.6%. Adjusted EBITDA increased 25.7% year over year to $453.3 million. Our estimate for adjusted EBITDA was $391.7 million.
The Precision & Science Technologies segment’s revenues totaled $313 million, representing 17.2% of net revenues in the quarter. Our estimate for segmental revenues was $318.5 million. On a year-over-year basis, the segment’s revenues inched up 1.4%. Organic sales declined 0.4%, while movement in foreign currencies had a positive impact of 1.8%.
The segment’s orders were flat on a year-over-year basis. Adjusted EBITDA increased 1.5% year over year to $94.1 million. Our estimate for adjusted EBITDA was $97.1 million.
Margin Profile
In the quarter under review, IR's cost of sales increased 7.3% year over year to $1.04 billion. Selling and administrative expenses increased 19.9% to $330.8 million.
Adjusted EBITDA in the quarter increased 19.1% year over year to $500.5 million. The margin increased to 27.5% from 25.9% in the year-ago period.
Balance Sheet & Cash Flow
While exiting 2023, Ingersoll Rand had cash and cash equivalents of $1.60 billion compared with $1.61 billion at the end of December 2022. Long-term debt (less of current maturities) was $2.69 billion compared with $2.72 billion in December 2022.
In 2023, the company paid out dividends of $32.4 million and repurchased treasury stocks worth $263 million.
In 2023, IR generated net cash of $1.38 billion from operating activities, up 59.2% year over year. Capital expenditure totaled $105.4 million compared with $94.6 million in the year-ago quarter. Free cash flow increased 65% to $1.3 billion.
2024 Outlook
Ingersoll Rand expects revenues to increase 5-7% for 2024. Organic revenues are estimated to increase 2-4%. For both the Industrial Technologies & Services and Precision & Science Technologies segments, organic revenues are predicted to increase 2-4% from the year-ago levels. Foreign currency movements are expected to have approximately 1% positive impact on total revenues.
Adjusted EBITDA is expected in the $1.92-$1.98 billion band, indicating an increase of 7-11% from the prior-year levels. Adjusted earnings are anticipated in the range of $3.14-$3.24 per share, indicating an increase of 6-9% from the year-earlier actuals.
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.
Parker-Hannifin Corporation (PH - Free Report) presently carries a Zacks Rank #2 (Buy). PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 2.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Flowserve Corporation (FLS - Free Report) currently has a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has been unchanged.
Tetra Tech Inc. (TTEK - Free Report) presently has a Zacks Rank of 2. TTEK delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for Tetra Tech’s 2024 earnings has increased 2.9%.