SWORDS, Ireland — Ingersoll-Rand plc (NYSE:IR), a maker of comfortable, sustainable, and efficient environments, reported Wednesday diluted earnings per share (EPS) from continuing operations of $1.10 for the third quarter of 2014.
The company reported net earnings of $291.3 million, or EPS of $1.07, for the quarter, a 76 percent increase over net earnings of $165.9 million, or EPS of $0.56, for the 2013 third quarter. Excluding restructuring and one-time costs from 2013 results, third-quarter 2014 EPS from continuing operations increased $0.19 per share, or 21 percent year-over-year.
"Our focus on new product development, services and effective operational execution has enabled us to deliver another solid quarter," said Michael W. Lamach, chairman and chief executive officer. "We are pleased with what we've been able to accomplish through steady investment, productivity initiatives and a balanced, pragmatic approach to capital allocation. In addition, our bookings signal a solid Q4 as we look ahead to the end of a successful 2014."
The company's reported revenues increased by 5 percent (up 6 percent, excluding currency) to $3,385 million, compared with revenues of $3,214 million for the 2013 third quarter. Total U.S. revenues were up 6 percent compared with 2013 and revenues from international operations increased 5 percent (up 5 percent, excluding currency). New equipment and aftermarket revenues were up 6 percent and 4 percent, respectively, compared with the third quarter of 2013.
The third-quarter operating margin was 13.0 percent compared with 11.8 percent in 2013. Adjusted for restructuring, the operating margin for the third quarter of 2014 was 13.0 percent and 12.1 percent for the third quarter of 2013. The year-over-year 0.9 percentage point adjusted margin improvement was due to higher volume, gains from productivity initiatives and pricing, partially offset by inflation and an increase in investment spending.
The Climate Segment delivers energy-efficient solutions globally and includes Trane and American Standard Heating and Air Conditioning which provides heating, ventilation and air conditioning (HVAC) systems and commercial and residential building services, parts, support and controls; and Thermo King, the leader in transport temperature control solutions. Revenues for the third quarter of 2014 were $2,644 million and increased 6 percent compared with the third quarter of 2013. Bookings increased 9 percent year-over-year.
On a year-over-year basis, total commercial HVAC revenues increased by a mid-single digit percentage with a mid-single digit percentage increase both in year-over-year equipment revenues and in parts, service and solutions. Commercial HVAC revenues in North America increased by a mid-single digit percentage in the quarter compared with last year and revenues increased slightly in overseas operations. Third-quarter 2014 commercial HVAC bookings reflect a mid-single digit percentage increase compared with last year.
Total Thermo King refrigerated transport revenues increased by a mid-teens percentage in the third quarter compared with last year with gains in all equipment categories and in aftermarket revenues. Bookings increased by more than 20 percent in the third quarter of 2014, due to strong orders for auxiliary power units, marine equipment and in the North American trailer business.
Residential HVAC revenues increased by a low-single digit percentage in the third quarter compared with 2013, primarily due to volume gains in air conditioning units. Bookings also increased by a low-single digit percentage compared with last year.
The Industrial Segment delivers products and services that enhance energy efficiency, productivity and operations. It includes Ingersoll Rand compressed air systems and services, power tools and material handling systems, and ARO fluid management equipment, as well as Club Car golf, utility and rough terrain vehicles. Total revenues in the third quarter of $741 million increased 3 percent compared with the third quarter of 2013. Bookings also increased 3 percent compared with last year.
Revenues for air compressors and industrial products increased by a low-single digit percentage compared with the third quarter of 2013. Revenues were up mid-single digits in the Americas and Asia and declined in Europe. Bookings increased by a low-single digit percentage compared with last year.
Third-quarter segment operating margin for Industrial was 14.7 percent (14.8 percent adjusted operating margin) compared with 15.9 percent (15.9 percent adjusted operating margin) last year.
Based on a forecast of moderate growth in worldwide construction and modest growth in industrial markets for the remainder of the year, the company expects revenues for full-year 2014 to increase approximately 4 percent with full-year reported EPS from continuing operations expected to be in the range of $3.17 to $3.21. Free cash flow for full-year 2014 is expected to be in the range of $800 to $850 million.
Fourth-quarter 2014 revenues are expected to increase approximately 3 to 4 percent with reported EPS from continuing operations for the fourth quarter in the range of $0.68 to $0.72.