Updated Aug 6 at 2:07pm ET.
Follow Ingersoll Rand to never miss an important update.
The company acquired Lone Star Blower, a manufacturer of specialized high-speed compressors and control systems. This deal adds more technical equipment to its industrial technologies arm and expands its rental and service business.
This is a classic example of the company's strategy to buy smaller, specialized firms that it can make more profitable using its own efficiency tools. By adding these specific blower technologies, it can sell more to its existing factory customers while growing its steady stream of service revenue.
Source: Business Wire
Director Aurobind Satpathy bought about $1 million in shares on the open market. This is a notable purchase because it was a direct buy rather than a routine award of stock for being on the board. When an insider uses their own cash to buy more of the company, it often shows they believe the current price is a good value. While one purchase does not change the business, it is a small sign of confidence from someone with an inside view of the company's health.
The company earned $0.86 per share this quarter, beating the $0.83 analysts expected. Revenue rose about 9 percent to $2.05 billion, also coming in ahead of targets. This growth was fueled by strong demand for its industrial equipment, with new orders rising 5 percent.
Profit margins remained a highlight, reaching 25.4 percent. This shows the company is successfully using its internal efficiency program to squeeze more profit out of every dollar of sales. With $1.2 billion in cash on hand, it remains in a strong position to keep buying smaller rivals to fuel future growth.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Shares rose after Atlas Copco, a major competitor in the air compressor market, reported sales and orders that were higher than expected. Because these two companies sell similar equipment to factories, a strong report from one often means the other is seeing the same healthy demand. This suggests that despite worries about the economy, factories are still spending money on the mission-critical systems the company provides. It is a good sign for the industry's overall health heading into the next round of financial reports.
Source: Barrons
Analysts have steadily lowered their price targets throughout the year following a series of downward revisions. Eight of 15 analysts rate the stock a buy, and the average target of $93 suggests about 5% upside from today's price.
Management has a very consistent habit of clearing the bars they set, beating profit expectations in five of the last eight quarters while growing sales about 9 percent.
| Expectation | |
|---|---|
| EPS | $0.90 |
| Revenue | $2.04B |
Seeking Alpha · Opinion · Aug 3
Business Wire · Press release · Aug 3
Seeking Alpha · Opinion · Jul 31
Business Wire · Press release · Jul 30
Barrons · Jul 16
Follow Ingersoll Rand to get the latest and most important updates.
Follow IR