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Ingersoll-Rand Sales Grow 7% in Second Quarter

HVACR systems manufacturer Ingersoll-Rand plc (NYSE:IR), Swords, Ireland, reported sales for the second quarter 2010 were up 7 percent to $3.7 billion from the 2009 second quarter. Orders were up 10 percent.

U.S. revenues were up 6 percent, and revenues from international operations were up 10 percent.

Profit was $196.4 million, up from 2009 second quarter earnings of $122.1 million.

"We are seeing continuing improvement in several of our key markets, including global demand for refrigerated transport and industrial, and strength in Club Car, North American residential HVAC and commercial HVAC in Asia," said Michael W. Lamach, president and CEO.

Climate Solutions, the HVACR group, reported sales in the second quarter of $2.01 billion, with operating income of $194.8 million. Revenues were up 6 percent.

Total commercial HVAC revenues were up 2 percent on a year-over-year basis, with a 5 percent decline in equipment and systems revenue and a 12 percent increase in parts, services and solutions. Commercial revenues increased in all major geographic regions except Europe, with strong year-over-year improvements in Asia. Activity in North America continues to be constrained by sluggish non-residential construction markets. Bookings increased 9 percent and backlog was up 16 percent.

Total Thermo King refrigerated transport revenues increased 30 percent in the second quarter compared with last year. Total worldwide refrigerated trailer and truck revenues increased 39 percent compared with last year, reflecting improved activity in both the U.S. and overseas markets. Sea-going container revenues, auxiliary power units and worldwide bus revenues also increased due to improving end-market activity. Thermo King bookings increased 22 percent year-over-year.

North American revenues for Hussmann refrigerated display cases increased 5 percent compared with the second quarter of 2009 from the continuing recovery in supermarket capital expenditures.

Second-quarter segment operating margin was 9.7 percent, including $9.5 million of restructuring/productivity investments, an increase of 2 percentage points compared with last year.

On July 16, 2010, the company announced plans to divest its European refrigerated display case business, which is sold under the KOXKA brand and was previously reported as part of the Climate Solutions segment.

Industrial Technologies segment sales for the second quarter were $625 million, up 16 percent from the prior-year period.

Air and Productivity revenues increased 13 percent, with volume increases in all major geographic regions. Revenues in the Americas increased 16 percent compared with last year as industrial markets continued to improve. Air and Productivity Solutions revenues outside the Americas increased by 10 percent compared with 2009, from improved activity in Asia. Bookings increased 29 percent year-over-year.

Club Car revenues increased 27 percent compared with the second quarter of 2009, due to improving golf and utility vehicle markets and market share gains in golf cars. Bookings were up 19 percent.

Second-quarter operating margin for Industrial Technologies of 12.6 percent, including $4.5 million of restructuring/productivity investments, increased by 5.5 percentage points compared with 7.1 percent last year, due to productivity, higher volumes from recovering industrial markets and new product introductions, and lower restructuring expenditures, partially offset by inflation.

Residential Solutions reported sales of $641 million, up 10 percent from 2009, as residential markets started to improve after four years of declines.

Total residential security revenues decreased 8 percent. North American revenues increased by 7 percent, primarily due to improving remodeling markets and an uptick in the U.S. new builder channel. This improvement was more than offset by South American revenues, which were down by more than 60 percent, primarily due to negative currency translation. Total residential security bookings were down 10 percent year-over-year as a 6 percent gain in North America was offset by a sharp decline in South America, related to currency translation.

Residential HVAC revenues increased 14 percent compared with 2009 from improved sales to the replacement market. Bookings increased 7 percent compared to 2009.

Second-quarter segment operating margin of 10 percent, including $1.1 million of restructuring/productivity investments, improved 4.1 percentage points compared with 5.9 percent in 2009, due to higher volumes and productivity gains.


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