Ingersoll Rand Plc posted stronger-than-expected quarterly earnings on Wednesday, saying cost-cutting boosted profit margins even as sales fell in a challenging housing and commercial construction market.
The parent company to Club Car and Thermo King also warned that many of its markets were slowing and forecast full-year results below Wall Street estimates.
The maker of Schlage locks and Trane air conditioners said net earnings rose 14 percent to $242.2 million, or 76 cents per share, from $212.1 million, or 62 cents per share, a year earlier. Sales fell 5 percent to $3.51 billion.
Club Car revenues increased by 9 percent compared with the fourth quarter of 2010, showing gains in golf cars, utility vehicles and aftermarket activity. Bookings increased slightly as golf-related markets continued to show low activity levels.
Ingersoll’s biggest segment, which makes heating and cooling systems for businesses and transportation, showed an 8 percent sales decline but much higher margins, lifted by stronger productivity and price increases. Climate Solutions sales were up when stripping out the divested Hussmann refrigeration business.
The company said its major markets were slowing and U.S. residential demand for air conditioners was likely to remain depressed for most of the year. Its residential and security solutions business showed lower bookings.
Ingersoll forecast full-year sales and profit below Wall Street estimates. It expects earnings from continuing operations of $2.90 to $3.10 a share on sales of $14 billion to $14.4 billion. Analysts’ average estimates are $3.12 a share and sales of $14.6 billion.