On Dec 1, Zacks Investment Research updated the research report on industrial goods manufacturer Ingersoll-Rand Plc IR.
Few days back, Ingersoll reported relatively solid third-quarter 2015 results with an improved operating performance that offset expected headwinds in the global economic environment. The company reported third-quarter 2015 net income of $300.9 million or $1.12 per share compared with $291.3 million or $1.07 per share in the year-earlier quarter. The healthy increase in GAAP earnings was primarily attributable to higher revenues of $3,486.9 million – up 3.0% year over year.
Excluding non-recurring items, adjusted earnings from continuing operations for the reported quarter were $1.21 per share compared with $1.10 in the year-ago quarter. Adjusted earnings from continuing operations exceeded the Zacks Consensus Estimate by 5 cents.
For full year 2015, management updated its guidance on expectations of a slow-to-moderate growth in the global construction and retrofit markets, and recovering but slow industrial markets for the remainder of the year. The company continues to expect organic revenues to increase by 4%-5% year over year while reported revenues are expected to grow by 3%. Adjusted earnings from continuing operations are expected to be between $3.69 and $3.74 per share, narrowed from the earlier projections of $3.66 and $3.81. Reported earnings from continuing operations for 2015 are expected to be in the range of $2.57-$2.62 per share, compared with earlier expectations of $2.59-$2.74. Free cash flow for the year is expected to be $950 million.
For fourth-quarter 2015, Ingersoll projects both organic and reported revenues to increase by 2%-3% each year over year. Adjusted earnings from continuing operations are expected to be in the range of 90 cents to 95 cents per share, with reported earnings in the range of 87 cents to 92 cents.
Ingersoll has a solid foundation of global brands and leading market share in all major product lines. The geographic and industry diversity coupled with a large installed product base provides ample growth opportunities within service, spare parts and replacement revenue streams. Additionally, the company’s complementary portfolio of products and services is likely to assist it in strengthening the market position and achieving high productivity.
At the same time, Ingersoll continues to focus on its strategic priorities, which include a disciplined capital allocation; strong and flexible balance sheet position; and cash flows enhancement to support dividend growth. We believe that such moves along with its robust operating platform and an efficient management team will help in the execution of these strategic priorities and drive net asset value and dividend growth in the future.
Ingersoll currently carries a Zacks Rank #3 (Hold). Other stocks that are worth a look in the industry include Compass Diversified Holdings CODI, Federal Signal Corp. FSS and Macquarie Infrastructure Corporation MIC, each carrying a Zacks Rank #2 (Buy).
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