Ingersoll Rand Widely Trumps 2Q Estimates But Warns of Slowdown

Ingersoll Rand (NYSE:IR) blew passed Wall Street’s profit expectations in the second quarter but posted lower sales and warned that demand in Asia and Latin America is slowing.

The Ireland-based maker of air conditioners earned $365.8 million, or $1.16 a share, compared with a year-earlier $92.3 million, or 26 cents.

Excluding one-time items, the company earned $1.15 a share, which widely ahead of average analyst estimates of 91 cents in a Thomson Reuters poll.

Operating margin improved to 12.5% from 7.3% a year ago, a reflection Ingersoll said of higher prices and improved productivity that helped to offset inflation and unfavorable exchange rates.

“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,” Ingersoll CEO Michael Lamach said in a statement.

However, revenue in the latest period fell 7% year-over-year to $3.82 billion and missed the Street’s view of $3.88 billion. In the U.S., sales slumped by 4%, and in Western Europe, economic turmoil led to a decline in demand for commercial HVAC systems.

Ingersoll said it forecasts the “difficult economic environment” persisting through at least the remainder of the year. Shares of the air quality control company slumped nearly 3.5% to $40.07 Friday morning.

The industrial manufacturer forecasted slowing growth rates in Asia and Latin America and declining activity in Western Europe, but it said growth rates in the U.S. will be moderate, particularly for refrigerated transport markets and commercial HVAC equipment.

“There remains sustained, but slowing, activity in the North American and Asian industrial markets,” Ingersoll said in a statement.

The company sees fiscal 2012 earnings, excluding special items, in the range of $3.15 to $3.25 a share on sales of $14 billion to $14.2 billion. Analysts are looking for earnings of just $3.02 on higher sales of $14.38 billion.

In the current period, it predicts earnings between 95 cents and a dollar on sales of $3.6 billion to $3.7 billion. Wall Street is anticipating 95 cents on $3.75 billion.