Ingersoll-Rand Plc (IR) posted adjusted earnings of $0.81 from continuing operations, beating the Zacks Consensus Estimate of $0.79.
Total net earnings came in at $86.2 million or $0.25 per share in the quarter compared to $232.2 million or $0.68 in the year-ago quarter.
Sales gained 5% year over year to $3,929 million, in line with management’s revised guidance of $3.90 billion – $3.95 billion. Total revenues, excluding the recently divested Hussmann business, were up approximately 7% year over year.
On a geographical basis, revenues from U.S. markets were down 1% while revenues from international operations grew 10% (up 5% excluding currency) primarily due to strong revenue growth in both Asia and Europe. During the quarter, orders increased 4% year over year.
On a segmental basis, Climate Solutions generated revenues of $2,290 million, up 8% from the year-ago quarter (up 5% excluding currency). Bookings increased 3% year-over-year. Total commercial HVAC revenues increased 9% driven by a 15% increase in equipment and systems revenues and a 2% increase in parts, services and solutions.
Revenues from Industrial Technologies were up 12% (up 9% excluding currency) to $697 million.
Revenues from Security Technologies improved 7% from last year to $438 million. The third-quarter results reflect stagnant building activity in the United States and in Europe.
Residential Solutions revenues declined 12% to $504 million. Bookings declined 8 percent year-over-year.
Operating margin moved up to 11.3% from 11.0% in the year-ago quarter driven by pricing actions and operational initiatives. These improvements were partially offset by inflation and unfavorable revenue mix.
During the quarter, Ingersoll Rand generated cash of $360 million from operations and ended the quarter with cash and equivalents of $1.4 billion.
In the quarter, the company also purchased 16 million shares as a part of a $2 billion share repurchase program authorized on April 7. The company expects to purchase more than 35 million shares by the end of 2011.
Guidance
Management stated that there is sustained activity in the worldwide industrial markets, global parts and service and across the company’s businesses in Asia. Growth in refrigerated transport markets and commercial HVAC replacement activity are expected to moderate for the remainder of the year. North American commercial construction market is estimated to continue its weak and uneven growth pattern.
In addition, demand in consumer related markets, especially residential HVAC and security, are expected to remain depressed.
For 2011, management expects revenues between $14,850 million and $14,950 million. EPS from continuing operations (excluding charges related to the Hussmann divestiture) is expected to be in the range of $2.70-$2.76. Cash flow is projected around $1.0 billion.
Orders were up approximately 4%. Management stated that Ingersoll Rand’s major end markets continued to show a mixed demand pattern in the third quarter of 2011. The company expects revenues between $3,525 million and $3,625 million for the fourth quarter of 2011. EPS from continuing operations is expected at 64 cents to 70 cents. There is sustained activity in the worldwide industrial markets, global parts and service and across the company’s businesses in Asia.
Based in Dublin, Ireland, Ingersoll-Rand, designs, manufactures, sells, and services a range of industrial and commercial products in the United States and internationally.
