) reported second quarter 2014 net income of $306.0 million or
$1.12 per share compared with $317.2 million or $1.05 per share in
the year-earlier quarter. Although net income decreased
significantly year over year, earnings increased marginally on a
per share basis due to lower number of outstanding shares in the
Excluding non-recurring items, adjusted earnings from continuing
operations for the reported quarter were $1.13 per share compared
with 93 cents in the year-ago quarter. Adjusted earnings from
continuing operations matched the higher end of the company's
guidance and exceeded the Zacks Consensus Estimate by a couple of
Ingersoll-Rand Company - Earnings Surprise |
Quarterly revenues of $3,542.9 million slightly lagged the Zacks
Consensus Estimate of $3,559 million and rose 4.3% year over year.
Revenues from the U.S. and the International segment were up 4% and
5%, respectively, compared with the year-ago period.
delivered sales of approximately $2,748.9 million in second quarter
2014 compared with $2,635.5 million in the year-ago quarter. The
year-over-year increase was driven by low single-digit increase in
commercial HVAC (heating, ventilation, and air conditioning)
revenues and mid single-digit improvement in revenues from parts,
services and solutions. Revenues from the Thermo King sub-segment
also increased by a high single digit percentage.
segment posted revenues of $794.0 million in the second quarter, up
from $762.9 million in the prior-year period. Air compressors and
industrial products revenues increased by a mid-single digit
percentage in the reported quarter, while Club Car revenues
declined by a low single digit percentage due to adverse impact by
the North American golf market.
Operating margin for the second quarter of 2014 was 13.1%
compared with 11.4% in the year-ago quarter. The operating margin
for Climate segment was 14.2% for the reported quarter and improved
from 12.5% in the year-earlier quarter due to higher volumes,
pricing, lower restructuring costs and productivity actions,
partially offset by inflation. The operating margin for Industrial
segment was 16.4%, up from 15.8% in the year-ago quarter driven by
higher volumes, pricing, lower restructuring costs and productivity
actions, partially offset by inflation.
Balance Sheet and Cash Flow
At quarter end, cash and cash equivalents aggregated $929.8
million, while long-term debt stood at $2,646.5 million. Net cash
from operating activities during the first half of the year was
$120.1 million compared with $428.8 million in the prior year.
Capital expenditure for the first six months of 2014 declined to
$92.6 million from $131.6 million in the year-ago period. Working
capital was 4.0% of revenues at the end of the reported quarter
compared with 3.1% in the prior-year period.
The company repurchased approximately 4 million shares for
approximately $200 million in the reported quarter as part of its
$1.5 billion share repurchase program. During 2014, Ingersoll aims
to repurchase a total of $1,375 to $1,475 million of shares under
its share repurchase program.
For full year 2014, management continues to expect revenues to
increase by 4% year over year due to moderate growth in global
industrial and construction markets. Ingersoll increased its annual
guidance for adjusted earnings from continuing operations from
$3.05-$3.20 per share to $3.18-$3.26. Reported earnings from
continuing operations for 2014 are also expected to be up from the
earlier range of $2.95-$3.10 per share to $3.13 to $3.21. Free cash
flow for the year is expected to be $900 million.
For third quarter 2014, Ingersoll projects revenues to increase
by 4% year over year. Reported earnings from continuing operations
are expected to be in the range of $1.00 to $1.04 per share.
Ingersoll currently carries a Zacks Rank #2 (Buy). Other stocks
that are worth a look in the industry with a similar rank include
Twin Disc, Incorporated
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