Ingersoll-Rand Plc (IR) posted net income of $307.5 million or 88 cents per share from continuing operations in the second quarter of fiscal 2010, compared with a net income of $240.3 million or 71 cents per share in the year-earlier quarter.
This result was in between management’s EPS guidance range of 85 cents and 95 cents, but missed the Zacks Consensus Estimate of 94 cents.
Sales gained 12% year over year to $3,892 million, in line with management’s guidance of $3.85 billion – $3.95 billion. With the exception of Residential Solutions, there was growth across all segments and major end-markets.
During the quarter, orders increased 9% year over year, which includes a double digit gain in the Climate, Industrial and Security segments.
On a segmental basis, Climate Solutions generated revenues of $2,048 million, up 14% from the year-earlier quarter. Revenues from Industrial Technologies were up 24% to $772 million.
Revenues from Security Technologies improved 5% from last year to $441 million. Residential Solutions revenues declined 1% to $632 million, due to softening end-market activity and operational execution issues.
Operating margin moved up to 12.9% in the quarter from 11.7% in the year-earlier quarter, driven by higher volumes and pricing actions partially offset by increased inflation.
During the quarter, Ingersoll Rand generated cash of $395 million from operations and used $38.7 million for capital expenditure.
In the quarter, the company also purchased 1.3 million shares as part of a $2 billion share repurchase program authorized on April 7.
Management stated that there was an improvement in the external markets as well as the internal business fundamentals. Furthermore, the company’s balance sheet position was strong, with a significant improvement in cash from operations.
Guidance
Based on the current achievements, management expects to drive better performance in 2011 and beyond.
For fiscal 2011, management expects revenues between $14.7 billion and $14.9 billion, implying growth of 11%-12%. EPS from continuing operations is expected to be in the range of $2.90-$3.10. Available cash flow is projected around $1.1 billion.
The company expects revenues between $3.85 billion and $3.95 billion for the third quarter of fiscal 2011, implying a year-over-year increase of 10%-13%. EPS from continuing operations is expected at 85 cents to 95 cents.
In an effort to improve the operating results for the Residential arm in the second half of 2011, the company will adopt corrective measures.
Based in Dublin, Ireland, Ingersoll-Rand, designs, manufactures, sells, and services a range of industrial and commercial products in the United States and internationally.
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