Ingersoll-Rand Sales Up 5% in 3Q

Ingersoll-Rand plc (NYSE: IR), Swords, Ireland, reported sales for the third quarter were $3.9 billion, an increase of 5 percent. Profit was $86.2 million, compared to year-ago profit of $232.2 million. Earnings results included charges related to the divestment of the Hussmann refrigeration business.

Total revenues, excluding the Hussmann business, were up 7 percent, compared with 2010. Reported U.S. revenues were down 1 percent, and revenues from international operations increased 10 percent (up 5 percent excluding currency), primarily due to strong revenue growth in both Asia and Europe.

"We are seeing challenging economic conditions in our residential heating ventilation and air conditioning (HVAC), security and golf businesses, as reflected in our revised guidance," said Michael W. Lamach, president and CEO. "Although our residential and consumer markets remain depressed, there are a number of opportunities well within our control to improve our earnings and margins going forward."

For the first nine months, sales increased 8.7 percent to $11.3 billion. Profit was $100.9 million, versus $430.1 million a year ago.

The company reports the results of its businesses in four segments based on industry and market focus. The company's four segments are Climate Solutions, which includes the Trane commercial heating, ventilation and air conditioning (HVAC) systems and Thermo King businesses; Industrial Technologies, which includes Air and Productivity Solutions and Club Car; Residential Solutions, which includes the residential HVAC and security businesses; and Security Technologies, which includes the commercial security businesses.

Climate Solutions revenues for the third quarter of 2011 were $2.29 billion, up 8 percent (5 percent excluding currency) compared with the third quarter of 2010. Bookings increased 3 percent year-over-year. For third-quarter ongoing operations, excluding Hussmann, year-over-year revenues and bookings were up 11 percent and 6 percent, respectively.

On a year-over-year basis, total commercial HVAC revenues increased 9 percent, with a 15 percent increase in equipment and systems revenues and a 2 percent increase in parts, services and solutions. Commercial revenues increased in all major geographic regions, with strong year-over-year improvements in Latin America and Europe. Revenues in North America were up 7 percent as markets continued to recover after reaching a cyclical bottom in the second half of 2010. Third-quarter bookings were up 9 percent compared with the 2010 third quarter.

Total Thermo King refrigerated transport revenues increased 17 percent in the third quarter compared with last year, with significant growth in both the Americas and Europe. Total worldwide refrigerated trailer and truck revenues increased by more than 20 percent compared with last year, reflecting improved activity in both the United States and overseas markets. Seagoing container revenues, auxiliary power units and worldwide aftermarket revenues also increased significantly.

Industrial Technologies revenues in the third quarter of $697 million increased 12 percent (up 9 percent excluding currency) compared with the third quarter of 2010. Air and Productivity revenues increased 17 percent, with volume increases in all major geographic regions.

Revenues in the Americas increased 11 percent compared with 2010, as industrial and commercial markets for both air compressors and tools continued to improve. Air and Productivity Solutions revenues outside the Americas increased by more than 20 percent compared with 2010 from strong activity in both Europe and Asia. Bookings increased 16 percent year-over-year with double digit gains in all geographic regions.

Club Car revenues declined compared with the third quarter of 2010 from declining markets for both golf cars and utility vehicles. Bookings increased 18 percent for the quarter when compared with low order levels in 2010.

Residential Solutions revenues were $504 million, down 12 percent (down 12 percent excluding currency) compared with 2010. Bookings declined 8 percent year-over-year.

Total reported residential security revenues were flat compared with 2010 as a result of stagnant remodeling and new builder markets, and ongoing inventory management actions by "big box" customers in the United States.

Residential HVAC revenues declined 15 percent compared with 2010 due to weak replacement demand and soft new housing construction. Residential revenues were also negatively impacted by the growth of R-22 systems and by the continued downward mix shift to lower SEER products.

Security Technologies third-quarter revenues of $438 million improved by 7 percent (4 percent excluding currency) compared with the third quarter of 2010. Third-quarter results reflect stagnant building activity in the United States and in Europe. Revenues in the Americas were up 1 percent from price improvements on lower volumes. Revenues from overseas markets were up 19 percent, from strong growth in Asia and currency translation gains.

Overall segment bookings were up 4 percent, with flat bookings in the Americas and Europe and strong improvements in Asia.