Hamilton,
Bermuda,
April 30, 2008
Ingersoll-Rand Company Limited (NYSE:IR), a leading diversified industrial firm, today announced that total revenues increased by 9.5% and operating income increased by 18% for the first quarter of 2008 compared with the 2007 first quarter.
"Our first-quarter 2008 performance continued to demonstrate the benefits of our transformed business portfolio, which is characterized by significantly improved product, market and geographic diversity, compared with our previous reliance on capital-intense, heavy machinery businesses," said Herbert L. Henkel, chairman, president and chief executive officer.
"We are managing our businesses to offset downturns in the domestic market with strong revenue growth from international operations and recurring revenues. As we expected when we began our transformation in 2000, we are better positioned to withstand isolated market downturns, and our continuing focus on innovation, accelerated productivity gains and cost and expense reductions will sustain our ability to grow and deliver consistent financial results."
First-quarter Business Review
The company classifies its businesses into three reportable segments based on industry and market focus: Climate Control Technologies, Industrial Technologies, and Security Technologies.
Climate Control Technologies provides solutions to transport, preserve, store and display temperature-sensitive products, and includes the market-leading brands of Hussmann(R) and Thermo King(R).
Revenues for the sector of $798 million increased by approximately 10% compared with the first quarter of 2007. First-quarter 2008 operating margin was 10.0%, compared with 9.5% in the 2007 first quarter. The margin increase was due to operational improvements and higher price realization, which were partially offset by increased material costs.
Worldwide trailer and truck revenues expanded by approximately 6%, with strong results
in Europe offsetting sharply lower sales in North America. Sea-going container, bus and
aftermarket revenues also increased worldwide. Sales of the TriPac(R) auxiliary power unit also increased sharply in the first quarter due to the increasing cost of diesel fuel.
Worldwide revenues for display cases and contracting increased slightly compared with the
first quarter of 2007.
Industrial Technologies is focused on providing solutions to enhance customers' industrial and energy efficiency and provides equipment and services for compressed air systems, tools, fluid power production and energy generation systems. Total revenues in the first quarter increased by approximately 11% to $743 million. Strength in industrial and process markets outside of North America and revenues from the aftermarket business continued to benefit the Air and Productivity Solutions business.
Security Technologies includes mechanical and electronic security products; biometric and
access-control technologies; security and scheduling software; integration and services. First-quarter revenues increased by approximately 7% to $622 million, reflecting moderate growth in the North American domestic commercial construction market and strong growth outside of North America.
Residential revenues in the Americas decreased modestly, reflecting a decline in same store sales at "Big Box" customers and ongoing weakness in the new-homebuilder channel in North America.
"The combination of Ingersoll Rand and Trane will create a global, diversified industrial company with pro-forma 2008 revenues of approximately $17 billion. The new Ingersoll Rand portfolio will include an $11 billion Climate Control business, which will offer high value equipment, systems and services necessary for delivering solutions across the temperature spectrum for indoor, stationary, and transport applications worldwide.
2008 Outlook-Ingersoll Rand Stand Alone
"Many of Ingersoll Rand's major end markets continued to experience solid overall demand in the first quarter as weaker activity in North America was offset by strong performance overseas. Orders increased by approximately 6% compared with last year. Our backlog increased in all business segments and grew by 10% overall compared with the
first quarter of 2007," said Henkel. "Based on our recent order pattern and a review of customer and channel activity, we continue to expect mid-single digit growth for the balance of 2008.
Going forward we expect flat performance in North America, moderating growth in Western Europe and continued brisk growth in the developing economies of Eastern Europe, Asia and Latin America.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice
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