Ingersoll-Rand plc (IR) has reported 14.86 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $198.80 million, or $0.75 a share in the quarter, compared with $233.50 million, or $0.88 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $220.60 million, or $0.84 a share compared with $248.60 million or $0.94 a share, a year ago.
Revenue during the quarter went up marginally by 0.99 percent to $3,358.80 million from $3,325.80 million in the previous year period. Gross margin for the quarter expanded 38 basis points over the previous year period to 30 percent. Total expenses were 89.67 percent of quarterly revenues, up from 89.20 percent for the same period last year. That has resulted in a contraction of 48 basis points in operating margin to 10.33 percent.
Operating income for the quarter was $346.90 million, compared with $359.30 million in the previous year period.
However, the adjusted operating income for the quarter stood at $361.60 million compared to $377.40 million in the prior year period. At the same time, adjusted operating margin contracted 58 basis points in the quarter to 10.77 percent from 11.35 percent in the last year period.
“Fourth-quarter business segment operating performance was strong and the core business remains very healthy,” said Michael W. Lamach, chairman and chief executive officer. “Organic bookings were up more than 7 percent and organic revenues were up 2 percent with excellent full-year free cash flow of 121 percent of adjusted net income. Our Climate segment met our already high internal expectations with fourth-quarter bookings up 9 percent and revenues up 3 percent, while operating margins expanded 70 basis points.
For fiscal year 2017, Ingersoll-Rand forecasts revenue to grow in the range of 2 percent to 3 percent. The company expects diluted earnings per share to be in the range of $4.15 to $4.35. The company expects diluted earnings per share to be in the range of $4.30 to $4.50 on adjusted basis.
Operating cash flow improves significantly
Ingersoll-Rand has generated cash of $1,500.20 million from operating activities during the year, up 76.27 percent or $649.10 million, when compared with the last year.
Cash flow from investing activities was $240.10 million from investing activities during the year as against cash outgo of $1,192.90 million in the last year.
The company has spent $705.20 million cash to carry out financing activities during the year as against cash outgo of $490.30 million in the last year period.
Cash and cash equivalents stood at $1,714.70 million as on Dec. 31, 2016, up 132.72 percent or $977.90 million from $736.80 million on Dec. 31, 2015.
Working capital increases sharply
Ingersoll-Rand has recorded an increase in the working capital over the last year. It stood at $1,989 million as at Dec. 31, 2016, up 106.97 percent or $1,028 million from $961 million on Dec. 31, 2015. Current ratio was at 1.55 as on Dec. 31, 2016, up from 1.26 on Dec. 31, 2015.
Debt comes down marginally
Ingersoll-Rand has recorded a decline in total debt over the last one year. It stood at $4,070.20 million as on Dec. 31, 2016, down 3.50 percent or $147.60 million from $4,217.80 million on Dec. 31, 2015. Total debt was 23.40 percent of total assets as on Dec. 31, 2016, compared with 25.20 percent on Dec. 31, 2015. Debt to equity ratio was at 0.61 as on Dec. 31, 2016, down from 0.72 as on Dec. 31, 2015. Interest coverage ratio improved to 6.45 for the quarter from 6.38 for the same period last year.
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