) reported a net income of $88.0 million or 29 cents per share
compared with $95.6 million or 31 cents in the year-earlier
quarter. Ingersoll failed to meet its earlier guidance of EPS
from continuing in the range of 35 cents to 40 cents.
Excluding non-recurring items, adjusted EPS came to 42 cents for
the reported quarter compared with 37 cents in the year-ago
quarter. Adjusted earnings for first quarter 2013 beat the Zacks
Consensus Estimate by a penny.
Revenues failed to meet the Zacks Consensus Estimate of $3,166
million and came in at $3,112 million, down 1% year over year.
Revenues from the U.S. were up a modest 1%, while revenue from
the International segment dipped 4%.
delivered sales of approximately $1.6 billion in the first
quarter, down 3% year over year. The year-over-year decline in
revenue was primarily due to a fall in revenue from Commercial
HVAC in all geographic regions, partially offset by increased
revenues from parts, services and solutions. Revenues from the
Thermo King sub-segment also declined by a mid-single digit
The Industrial Technologies
segment posted revenues of $680 million in first quarter down 1%
year over year. The dip in the segment revenue was driven by
lower revenues from the air and productivity, aided by a decline
in volume in Asia. However, it was partially offset by a rise in
volume from the Americas and Western Europe.
segment posted a solid 10% year-over-year increase in revenue to
$464 million. However, excluding the impact of product line
transfer from the Security Technologies segment, revenues
increased 6% year over year. The increase in revenue was driven
by higher sales to the booming builder markets in the U.S.
The Security Technologies
segment recorded sales of $352 million, down 7% year over year.
However, excluding the impact of product line transfer to the
Residential Solutions, revenues were down 3%. The
year-over-year decrease was primarily due to the decrease in
sales in the Americas and the overseas market.
Adjusted operating margin for the first quarter of 2013 was
7.4% compared with 7.5% in the year-ago quarter. Negative effects
of inflationary pressures, unfavorable revenue mix, lower volume
and higher investment spending neutralized the positive effect of
improved price structure and operational excellence.
Balance Sheet and Cash Flows
As of Mar, 2013, cash and cash equivalents aggregated $832.9
million. Long-term debt stood at $2,271.1 million.
Net cash from operating activities dropped significantly and
came in at a negative $8 million compared with $16.4 million in
the year-earlier quarter. Capital expenditure for the period
increased for the period to $71.4 million compared with $52.9
million in the year-ago quarter.
Subsequent to the quarter-end, Ingersoll announced a share
repurchase program worth $2 billion. The company expects to
complete this program by the first quarter of 2014.
Update on Spinoff
In Dec 2012, Ingersoll approved a plan to spin off its
commercial and residential security businesses. The separation
will result in two standalone companies: Ingersoll Rand and the
new security company.
The company expects the divesture to be completed prior to
year-end 2013. Post-completion, Ingersoll will cease to have any
ownership stake in the new security company, which will become an
independent publicly traded firm.
For second quarter 2013, Ingersoll projects revenues to be
between $3.8 billion and $3.9 billion. Adjusted EPS from
continuing operations is targeted to be in the range of $1.05 to
$1.10, with EPS to be in the range of $0.99 to $1.04.
For full year 2013, management expects macro-economic
headwinds to continue and has reiterated its conservative revenue
guidance. Management expects revenues to be in the range of $14.2
billion to $14.6 billion with adjusted EPS from continuing
operations between $3.45 and $3.65.
The available cash flow is expected to be $1.1 billion by the
end of 2013. Including the costs associated with the planned
spin-off of the Residential Security Businesses, EPS from
continuing operations is expected to be in the range of $2.85 to
The company operates in an intensely competitive landscape
that includes big players such as
The Babcock & Wilcox Company
EnPro Industries, Inc
Omnitek Engineering Corp.
), each carrying a Zacks Rank #1 (Strong Buy). Ingersoll
currently has a Zacks Rank #2 (Buy).
BABCOCK&WILCOX (BWC): Free Stock Analysis
INGERSOLL RAND (IR): Free Stock Analysis
ENPRO INDUS INC (NPO): Free Stock Analysis
OMNITEK ENGINRG (OMTK): Get Free Report
To read this article on Zacks.com click here.