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Ingersoll Rand (IR) to Post Q4 Earnings: What's in the Cards?

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Ingersoll Rand Inc. IR is scheduled to release fourth-quarter 2021 results on Feb 23, after market close.

The company’s earnings surpassed estimates in each of the last four quarters, the average surprise being 19.78%. Its third-quarter 2021 earnings of 57 cents per share surpassed the Zacks Consensus Estimate of 46 cents by 23.91%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

In the past three months, the stock has lost 11.5% compared with the industry’s decline of 11.9%.

Factors at Play

Strength in the aftermarket businesses, coupled with its strong product portfolio, is anticipated to have been beneficial for Ingersoll Rand in the fourth quarter. Solid momentum across the company’s medical and Dosatron units, driven by an improvement in demand across end markets, is likely to have supported its performance. However, its divestment of the Specialty Vehicle Technologies (June 2021) segment might have affected its top-line performance in the to-be-reported quarter on a year-over-year comparable basis.

The company has been experiencing escalating costs and expenses over the past few quarters. In third-quarter 2021, its costs of sales increased 18.8% year over year while its selling and administrative expenses rose 15.6%. Supply-chain challenges, inflation on logistics and direct material costs, as well as impacts of discretionary and one-time costs, might have hurt its margins and profitability in the fourth quarter. However, its pricing actions are likely to have aided it.

Given Ingersoll Rand’s extensive regional presence, its operations are also subject to global economic, political risks and forex woes. A stronger U.S. dollar might have hurt the company's overseas business in the fourth quarter.

However, acquisitions made by IR positively impacted its revenues by 3.6% in third-quarter 2021. The trend is likely to have continued in the to-be-reported quarter, given the strength across its acquired businesses. The company acquired Tuthill Vacuum and Blower Systems (February 2021), which strengthened its existing vacuum and blower product offerings. Its Maximus acquisition (August 2021) has enhanced its prospects in rural water treatment and industrial markets. Also, the buyout of Air Dimensions Inc. (October 2021) expanded its pumping solution offerings. For 2021, it anticipates a revenue contribution of $135 million from the buyout/mergers.

The consensus estimate for Ingersoll Rand's fourth-quarter total revenues is currently pegged at $1,414 million, suggesting a decrease of 6.4% from the year-ago reported number.

Earnings Whispers

According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

But that is not the case here, as we will see below.

Earnings ESP: Ingersoll Rand has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at 61 cents.

Ingersoll Rand Inc. Price and EPS Surprise

Ingersoll Rand Inc. Price and EPS Surprise
Ingersoll Rand Inc. Price and EPS Surprise

Ingersoll Rand Inc. price-eps-surprise | Ingersoll Rand Inc. Quote

Zacks Rank: The company carries a Zacks Rank #4 (Sell).

Key Picks

Here are some companies you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat:

Franklin Electric Co., Inc. FELE has an Earnings ESP of +4.76% and a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Franklin Electric’s earnings is pegged at 63 cents per share for the to-be-reported quarter. FELE’s shares have lost 11.9% in the past three months.

The Middleby Corporation MIDD has an Earnings ESP of +3.18% and a Zacks Rank of 2, currently.

The Zacks Consensus Estimate for Middleby’s earnings is pegged at $2.07 per share for the fourth quarter of 2021. MIDD’s shares have lost 2% in the past three months.

Graphic Packaging Holding Company GPK has an Earnings ESP of +1.12% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for Graphic Packaging’s earnings is pegged at 37 cents per share for the to-be-reported quarter. GPK’s shares have lost 3.6% in the past three months.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Ingersoll Rand Inc. (IR) : Free Stock Analysis Report

Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report

The Middleby Corporation (MIDD) : Free Stock Analysis Report

Franklin Electric Co., Inc. (FELE) : Free Stock Analysis Report

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