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Ingersoll-Rand (IR) Q1 Earnings & Revenues Beat Estimates

Zacks Equity Research

Ingersoll-Rand plc IR reported better-than-expected results for first-quarter 2019.

Quarterly adjusted earnings came in at 89 cents per share, up 27.1% year over year. The bottom line also outpaced the Zacks Consensus Estimate of 79 cents.

Revenues came in at $3,576 million, up 6% year over year. The top line also exceeded the consensus estimate of $3,503 million. Revenues grew 8% organically. 

Ingersoll-Rand PLC (Ireland) Price, Consensus and EPS Surprise

Ingersoll-Rand PLC (Ireland) Price, Consensus and EPS Surprise | Ingersoll-Rand PLC (Ireland) Quote

Bookings in the quarter were $3,744 million, down 4% year over year.

Segmental Breakup

Revenues in the Climate segment came in at $2,803.7 million, up 7.4% year over year. The top line of the Industrial segment declined 0.3% to $772.2 million.

Costs/Margins

Cost of goods sold in the reported quarter totaled $2,517.3 million, up 4% year over year. Selling and administrative expenses were $740.1 million, up 2.6%.

Quarterly adjusted operating margin expanded 90 basis points to 9.4%. This upside stemmed from stellar revenues, pricing actions and improved productivity.

Balance Sheet & Cash Flow

Exiting the first quarter, Ingersoll-Rand had cash and cash equivalents of $1,907.4 million compared with $903.4 million in the last reported quarter. Long-term debt increased to $5,226.5 million from $3,740.7 million recorded as of Dec 31, 2018.

In the first quarter, the company used net cash of $52.6 million from operating activities compared with $66.2 million used in the prior-year quarter. Capital expenditure totaled $60.8 million versus $52.8 million.

During the reported quarter, the company distributed $127.7 million as dividends and repurchased shares worth $250 million.

Outlook

Ingersoll-Rand is poised to grow on the back of continued growth in bookings and revenues as well as its unique capital allocation strategy. The company has revised its earnings view for 2019 from $6.15-$6.35 per share to roughly $6.35.

Zacks Rank & Key Picks

Ingersoll-Rand currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space are DXP Enterprises, Inc. DXPE, Dover Corporation DOV and Cintas Corporation CTAS. While DXP Enterprises sports a Zacks Rank #1 (Strong Buy), Dover and Cintas carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DXP Enterprises surpassed estimates thrice in the trailing four quarters, the average beat being 46.55%.

Dover exceeded estimates in each of the trailing four quarters, the average beat being 8.61%.

Cintas surpassed estimates in each of the trailing four quarters, the average beat being 6.09%.

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