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IR Gears Up to Post Q2 Earnings: What Lies Ahead for the Stock?

IR Gears Up to Post Q2 Earnings: What Lies Ahead for the Stock?

Globe and Mail30-07-2025
Ingersoll Rand Inc. IR is scheduled to release second-quarter 2025 results on July 31, after market close.
The Zacks Consensus Estimate for Ingersoll Rand's second-quarter earnings has remained steady in the past 30 days. The company has an impressive earnings surprise history, having outperformed the consensus estimate in two of the preceding four quarters, matching on one occasion and missing once, the average surprise being 2.2%.
The consensus estimate for revenues is pegged at $1.84 billion, indicating growth of 2.1% from the prior-year quarter's figure. However, the consensus estimate for adjusted earnings is pinned at 80 cents per share, indicating a 3.6% decline from the year-ago quarter's number.
Let's see how things have shaped up for IR this earnings season.
Factors to Note Ahead of IR's Results
IR's Industrial Technologies & Services (IT&S) segment is anticipated to have performed well in the second quarter, driven by higher orders across its product portfolio of industrial vacuums and blowers, compressors and power tools. We anticipate the segment's revenues to increase 0.3% year over year to $1.47 billion.
The Precision and Science Technologies segment's results are expected to benefit from solid momentum in the life sciences business, driven by growth in short-cycle orders and multi-year contract wins for the production of legacy space suits. We expect the segment's revenues to increase 12.4% year over year to $380.9 million.
Ingersoll Rand has been making continued investments to support growth in demand generation and the Industrial Internet of Things, which are expected to have driven its performance. Also, the company's solid product portfolio, innovation capabilities and focus on boosting aftermarket businesses are other tailwinds for it.
Synergistic gains from the acquisitions made by IR are expected to have boosted revenues. In February 2025, the company acquired SSI Aeration, Inc., integrating it into the IT&S segment. The buyout enhanced Ingersoll Rand's ability to offer integrated low-pressure compressor and aeration solutions. The acquisitions of Air Power Systems Co., LLC ('APSCO'), Blutek s.r.l. (Blutek) and UT Pumps & Systems Private Limited (UT Pumps) in October 2024 strengthened the company's market position and technology portfolio across energy-efficient bulk handling, high-specification projects and pump technologies.
In June 2024, Ingersoll Rand acquired ILC Dover, integrating it into the Precision & Science Technologies segment. This acquisition enhanced the company's capabilities, with ILC Dover's single-use solutions for biopharma and pharma production complementing its expertise in liquid handling technologies and positive displacement pumps.
However, increasing costs of sales are likely to have weighed on IR's performance. Rising selling and administrative expenses are expected to have dented the company's margins and profitability. For the quarter under review, we anticipate Ingersoll Rand's adjusted EBITDA margin to be 26.6%, indicating a decline of 80 basis points on a year-over-year basis.
The company has considerable exposure to overseas markets. Given its substantial international operations, foreign currency headwinds are likely to have marred its profitability.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for IR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.
Earnings ESP: IR has an Earnings ESP of -0.75% as the Most Accurate Estimate is pegged at 79 cents per share, which is lower than the Zacks Consensus Estimate of 80 cents. You can uncover the best stocks before they're reported with our Earnings ESP Filter.
Zacks Rank: IR presently carries a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks here.
Stocks to Consider
Here are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
Parker-Hannifin Corporation PH has an Earnings ESP of +0.23% and a Zacks Rank of 3 at present. The company is slated to release fourth-quarter fiscal 2025 (ended June 2025) results on Aug. 7.
Parker-Hannifin's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.5%.
Eaton Corporation plc ETN has an Earnings ESP of +0.33% and a Zacks Rank of 3 at present. The company is scheduled to release second-quarter 2025 results on Aug. 5.
Eaton's earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 1.9%.
Emerson Electric Co. EMR has an Earnings ESP of +0.46% and a Zacks Rank of 3 at present. The company is slated to release third-quarter fiscal 2025 (ended June 2025) results on Aug. 6.
Emerson's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.4%.
#1 Semiconductor Stock to Buy (Not NVDA)
The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.
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Parker-Hannifin Corporation (PH): Free Stock Analysis Report
Eaton Corporation, PLC (ETN): Free Stock Analysis Report
Ingersoll Rand Inc. (IR): Free Stock Analysis Report
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