Diversified industrial company Ingersoll-Rand Co. Ltd. (IR: Quote) reported Thursday a profit for the second quarter that soared from last year, which was weighed down by significant impairment costs related to the disposition of Hussmann refrigeration business. Striping down special items, adjusted earnings per share from continuing operations grew and topped analysts' expectations.
The company also provided earnings and revenue guidance for the third quarter and raised earnings forecast for the full-year 2012.
"Our results this quarter reflect the continued successful execution of our strategy to deliver profitable and sustainable growth. We are very pleased to have delivered another quarter of earnings per share growth that exceeded our forecast in the face of continued economic headwinds," Chairman and CEO Michael Lamach said in a statement.
The Dublin, Ireland-based company posted net earnings of $365.8 million or $1.16 per share for the second quarter, sharply higher than $92.3 million or $0.26 per share n the prior-year quarter.
Earnings from continuing operations for the quarter nearly tripled to $358.0 million or $1.14 per share from $122.6 million or $0.35 per share in the year-ago quarter.
The results for the year-ago quarter included $200.5 million or $0.57 per share of impairment costs related to the disposition of Hussmann refrigeration business.
Excluding items, adjusted earnings from continuing operations grew to $1.15 per share from $0.92 per share last year. On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $0.91 per share for the second quarter. Analysts' estimates typically exclude special items.
Net revenues for the quarter decreased 7 percent to $3.82 billion from $4.09 billion in the same quarter last year. Seventeen Wall Street analysts' consensus estimate of $3.88 billion.
Total revenues, excluding the results of Hussmann, were up slightly and up 3 percent excluding currency. U.S. revenues, excluding Hussmann, were up 4 percent, and revenues from international operations declined by 5 percent or increased 1 percent excluding currency.
Operating margin for the second quarter expanded 520 basis points to 12.5 percent from last year, driven by higher pricing and productivity. However, margin edged up only 20 basis points 12.3 percent, excluding Hussmann results and impairment costs.
Looking ahead to the third quarter, the company expects earnings from continuing operations in a range of $0.95 to $1.00 per share, on anticipated quarterly revenues between $3.6 billion and $3.7 billion. Analysts expect the company to report earnings of $0.95 per share for the third quarter, on revenues of $3.76 billion.
For fiscal 2012, the company raised its guidance for earnings from continuing operations to a range of $3.15 to $3.25 per share from the prior guidance in the range $2.90 to $3.10 per share. The company now expects annual revenues between $14.0 billion and $14.2 billion, compared to the previous guidance of $14.0 billion and $14.4 billion.
Street is currently looking for full-year 2012 earnings of $3.02 per share on revenues of $14.38 billion.
"While we expect the difficult economic environment to persist throughout 2012, our focus remains on accelerating revenue growth, further expanding operating margins and maintaining a balanced, disciplined capital allocation strategy," Lamach added.
In Friday's regular trading session, IR is currently trading at $39.82, down $1.65 or 3.98% on a volume of 0.16 million shares.
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by RTT Staff Writer
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