Earnings Preview: Ingersoll-Rand

Ingersoll-Rand (IR) is expected to report Q1 earnings before market open on Wednesday, April 30, with a conference call scheduled for 10:00 am ET.

Guidance

Analysts are looking for EPS of 73c on revenue of $2.1B. The consensus range is 69c to 78c for EPS, and $1.97B to $2.16B for revenue, according to First Call. In its Q4 earnings conference call Ingersoll-Rand gave Q1 and FY08 EPS guidance, and FY08 revenue guidance. The company expects Q1 EPS of 70c to 75c vs. consensus of 79c, and FY08 EPS of $3.80 to $3.90 vs. consensus of $3.81.

The company said it anticipated that the Trane (TT) acquisition would require a number of one-time charges, primarily inventory step up, estimated at 40c to 45c per share. The charges were not reflected in its full-year forecast. The company said it expected FY08 revenue growth of approximately 6% to 7%, and on March 6 forecast FY08 revenue of $14.2B vs. consensus of $14.39B.

Analyst Views

On April 7, Morgan Stanley said that the North American HVAC market is softening and that it expects 2008 Street estimates to be lowered in the coming months. The firm said it sees a downside risk to Ingersoll-Rand shares, and rate the company shares at Equal Weight.

Investors will be interested to see what effect the Trane acquisition has had on Ingersoll-Rand's financial results, and if the company adjusts any of its guidance accordingly.