SWORDS, Ireland – Ingersoll-Rand plc (NYSE:IR), a world leader in creating and sustaining safe, comfortable and efficient environments, today reported that total revenues increased 13 percent for the first quarter of 2011 compared with the 2010 first quarter; orders increased by approximately 12 percent; and diluted earnings per share (EPS) from continuing operations were at the top of the prior guidance range.
The company reported a net loss of $77.6 million, or EPS of $(0.22), for the first quarter of 2011. First-quarter net income included $121.0 million, or EPS of $0.35, from continuing operations, as well as $198.6 million of after-tax loss from discontinued operations. Discontinued operations included the results of discontinued businesses net of tax, as well as an after-tax impairment charge related to the divestiture of Hussmann. This compares with net earnings for the 2010 first quarter of $1.4 million, which included EPS of $0.05 from continuing operations and costs of $(0.05) from discontinued operations. The 2010 first quarter included approximately $41 million or EPS of $(0.12) of health care legislation-related tax expense.
“During the first quarter we made additional progress toward achieving our long-term revenue growth, operating margin and earnings objectives,” said Michael W. Lamach, chairman, president and chief executive officer of Ingersoll Rand. “First-quarter revenues increased by 13 percent, and we leveraged these gains to improve operating income by 66 percent and to increase our operating margins by more than our 2 percentage point goal. We continued to build a culture in which our activities exceed customers’ expectations and improve our efficiency.”
Additional Highlights for the 2011 First Quarter
Revenues: The company’s reported revenues increased 13 percent to $3,138 million, compared with revenues of $2,766 million for the 2010 first quarter. Total revenues excluding currency were up 12 percent, compared with 2010. Reported U.S. revenues were up 10 percent, and revenues from international operations also increased approximately 19 percent (up 16 percent excluding currency), primarily due to strong growth in Asia.
Operating Income and Margin: Operating income for the first quarter was $231.9 million, an increase of 66 percent compared with $139.5 million for the 2010 first quarter. The first quarter operating margin was 7.4 percent, an increase of 2.4 percentage points compared to an operating margin of 5 percent for the same period of 2010. Higher volumes, pricing actions and operational excellence initiatives drove the increase in operating profits and margins. These improvements were partially offset by inflation.
Interest Expense and Other Income/Expense: Interest expense of $68.3 million for the first quarter of 2011 decreased compared with $71 million in the 2010 first quarter, due to lower year-over-year debt balances. Other income totaled $5.1 million for the first quarter of 2011, a slight decrease compared with the 2010 first quarter.
Taxes: The company had an effective tax rate of approximately 25 percent in the first quarter of 2011, which was slightly above the forecast rate of 24 percent.