Earnings by cost cutting (and an artificially low tax rate). Fine.
But top line was horrendous: * all the growth, if not more, came from price * claims about Asia/Latin America growing clearly indicate US and Europe are bad performers * claims about 20%+ revenues from new products highlights that the core business is rotting (not enough investment to grow? mismanagement?)
Really a very poor end to 2011 for IR. Management is spending $$$ on share buybacks (gotta ensure Lamach's options vest in the money?) rather than giving it back direct to shareholders through buybacks. Can't trust the exec's here, for sure.
Will The Restructuring Ever Deliver? Ever since IR management started talking about restructuring back in 2008, investors have been waiting to see the fruits of those labors. For the most part, that's been a wait in vain as the company still trails most of its peers in terms of margins. While many other industrial companies like Dover (DOV), Emerson (EMR), and Danaher (DHR) are back to, or above, their prior peak North American performance, Ingersoll-Rand is still well below. Mismanagement?
How much longer will this record of under performance be accepted?
Lets get ready to roll? He sounds like the guy who said the same words on 9.11, right before the plane crashed....
He is so out of touch with reality it is unbelievable. Grandiose plans for transforming the corporation into a world class organisation, but no strategy on how to actually get there. Dismal culture, full of drones and yes men, especially among the executive ranks.
Corporate HQ, that is where a lot of spending can be cut, set some of the businesses loose from the corporate nonsense, give them some of those savings to spend on innovation, then we would be talking...
Was q4 really that bad vs others? rather not and after all who cared about q4? To mgmt's credit, they've spent last 18 months divesting bobcat and hussman, the result is a simplified group structure, with a much better industrial logic.
FY11 wasn't great: mgmt's lack of anticipation on the R22 issue has to be blamed but ok stock has been punished for it and now it's past; the rest can be attributed to end market weakness and one offs (hussman impairment)...
what you now have is a company with 10% fcf yield, with 75% of revenues that are recurring or driven by replacement demand; a valuation of less than 15x trough earnings when end markets are still 40% below prior peak and apparently at inflexion point; expectations have been reset and guidance appears a reasonable starting point... what are the reasons for selling this?
Culture is wacked out. Arrogance and lack of candidness among the leaders is the key issue. A lot of smart people who understand "best practices" but little understanding of the business. Leaders focus on looking good in meetings while the customers go to the competition