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Ingersoll (IR) Up 1.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Ingersoll Rand (IR - Free Report) . Shares have added about 1.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ingersoll due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Ingersoll Rand reported first-quarter 2023 adjusted earnings of 63 cents per share, which beat the Zacks Consensus Estimate of earnings of 48 cents per share. The bottom line increased 40% year over year.
Total revenues of $1,629.3 million outperformed the Zacks Consensus Estimate of $1,480 million. The top line increased 21.9% year over year on a 20.4% rise in organic revenues. Acquisitions contributed 5.8% to revenues, while foreign currency movements had an adverse impact of 4.3%.
Orders in the quarter totaled $1,776.8 million, up 9% from the year-ago quarter. Organically orders increased 7.6%.
Segmental Discussion
The Industrial Technologies & Services segment generated revenues of $1,317.2 million, accounting for 80.4% of net revenues in the reported quarter. Our estimate for segmental revenues was $1,147.7 million. Sales increased 26.7% year over year on 24.5% growth in organic sales. Acquisitions contributed 6.7%, while movement in foreign currencies had a negative impact of 4.5%. The segment’s orders in the quarter were up 12.2% (up 10% organically).
The Precision & Science Technologies segment’s revenues totaled $312.1 million, representing 19.6% of net revenues in the quarter. Our estimate for segmental revenues was $322.3 million. On a year-over-year basis, the segment’s revenues increased 4.9%. Organic sales grew 6%. Acquisitions had a positive impact of 2.4%, while movement in foreign currencies had a negative impact of 3.5%. The segment’s orders were down 3.1% (down 1.7% organically).
Margin Profile
Adjusted EBITDA in the quarter increased 32.4% year over year to $440.1 million. The margin increased to 24.6% from 22.7% in the year-ago period.
On a segmental basis, the adjusted EBITDA margin increased 240 basis points (bps) year over year to 26.2% for the Industrial Technologies & Services segment. The same increased 170 bps to 30.3% for the Precision & Science Technologies segment.
Balance Sheet & Cash Flow
While exiting the first quarter of 2023, Ingersoll Rand had cash and cash equivalents of $1,119.3 million, compared with $1,613.0 million recorded at the end of December 2022. Long-term debt (less current maturities) was $2,708.8 million, compared with $2,716.1 million in December 2022.
In the first three months of 2023, this Zacks Rank #1 (Strong Buy) company returned $85.1 million to shareholders through dividends and share buybacks.
In the same time period, IR generated net cash of $170.3 million from operating activities, up 239.9% year over year. Capital expenditure totaled $22.4 million, compared with $17.9 million in the year-ago quarter. Free cash flow increased 359.3% to $147.9 million.
2023 Outlook
For 2023, Ingersoll Rand expects revenues to increase 10-12%, compared with 7-9% predicted earlier. Organic revenues are estimated to increase 6-8%, compared with 3-5% predicted before. The Industrial Technologies & Services segment’s revenues are predicted to increase 6-8% organically, compared with 3-5% expected earlier, while the Precision & Science Technologies segment’s revenues are forecast to climb 5-7% organically, compared with 4-6% predicted earlier. Adverse foreign currency movements are expected to have no impact on total revenues.
Adjusted EBITDA is expected to be $1,660-1,710 million, indicating an increase of 16-19% year over year. Adjusted earnings are anticipated to be $2.64-2.74 per share, indicating an increase of 11-16%. The company expected adjusted earnings of $2.48-$2.58 per share earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Ingersoll has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ingersoll has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Ingersoll (IR) Up 1.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Ingersoll Rand (IR - Free Report) . Shares have added about 1.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ingersoll due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Ingersoll Rand 1 Earnings & Revenues Surpass Estimates
Ingersoll Rand reported first-quarter 2023 adjusted earnings of 63 cents per share, which beat the Zacks Consensus Estimate of earnings of 48 cents per share. The bottom line increased 40% year over year.
Total revenues of $1,629.3 million outperformed the Zacks Consensus Estimate of $1,480 million. The top line increased 21.9% year over year on a 20.4% rise in organic revenues. Acquisitions contributed 5.8% to revenues, while foreign currency movements had an adverse impact of 4.3%.
Orders in the quarter totaled $1,776.8 million, up 9% from the year-ago quarter. Organically orders increased 7.6%.
Segmental Discussion
The Industrial Technologies & Services segment generated revenues of $1,317.2 million, accounting for 80.4% of net revenues in the reported quarter. Our estimate for segmental revenues was $1,147.7 million. Sales increased 26.7% year over year on 24.5% growth in organic sales. Acquisitions contributed 6.7%, while movement in foreign currencies had a negative impact of 4.5%. The segment’s orders in the quarter were up 12.2% (up 10% organically).
The Precision & Science Technologies segment’s revenues totaled $312.1 million, representing 19.6% of net revenues in the quarter. Our estimate for segmental revenues was $322.3 million. On a year-over-year basis, the segment’s revenues increased 4.9%. Organic sales grew 6%. Acquisitions had a positive impact of 2.4%, while movement in foreign currencies had a negative impact of 3.5%. The segment’s orders were down 3.1% (down 1.7% organically).
Margin Profile
Adjusted EBITDA in the quarter increased 32.4% year over year to $440.1 million. The margin increased to 24.6% from 22.7% in the year-ago period.
On a segmental basis, the adjusted EBITDA margin increased 240 basis points (bps) year over year to 26.2% for the Industrial Technologies & Services segment. The same increased 170 bps to 30.3% for the Precision & Science Technologies segment.
Balance Sheet & Cash Flow
While exiting the first quarter of 2023, Ingersoll Rand had cash and cash equivalents of $1,119.3 million, compared with $1,613.0 million recorded at the end of December 2022. Long-term debt (less current maturities) was $2,708.8 million, compared with $2,716.1 million in December 2022.
In the first three months of 2023, this Zacks Rank #1 (Strong Buy) company returned $85.1 million to shareholders through dividends and share buybacks.
In the same time period, IR generated net cash of $170.3 million from operating activities, up 239.9% year over year. Capital expenditure totaled $22.4 million, compared with $17.9 million in the year-ago quarter. Free cash flow increased 359.3% to $147.9 million.
2023 Outlook
For 2023, Ingersoll Rand expects revenues to increase 10-12%, compared with 7-9% predicted earlier. Organic revenues are estimated to increase 6-8%, compared with 3-5% predicted before. The Industrial Technologies & Services segment’s revenues are predicted to increase 6-8% organically, compared with 3-5% expected earlier, while the Precision & Science Technologies segment’s revenues are forecast to climb 5-7% organically, compared with 4-6% predicted earlier. Adverse foreign currency movements are expected to have no impact on total revenues.
Adjusted EBITDA is expected to be $1,660-1,710 million, indicating an increase of 16-19% year over year. Adjusted earnings are anticipated to be $2.64-2.74 per share, indicating an increase of 11-16%. The company expected adjusted earnings of $2.48-$2.58 per share earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Ingersoll has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ingersoll has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.