Ingersoll Rand Beats Q2 Earnings Estimates, Raises Revenue Guidance

Ingersoll Rand Inc. IR reported second-quarter 2026 adjusted earnings of 86 cents per share, beating the Zacks Consensus Estimate of 83 cents by 3.6%. The bottom line increased 7.5% from the year-ago quarter.Revenues of $2.05 billion surpassed the consensus estimate of $1.96 billion by 4.5% and rose 8.5% year over year. Organic revenues increased 4.1%, while acquisitions and favorable foreign currency movements contributed 2.8% and 1.6%, respectively.IR's Orders and Organic GrowthIn the second quarter of 2026, its total orders increased 5.3% to $2.04 billion. Organic orders increased 1.6% year over year. Acquisitions added 2.4% to order growth, while foreign currency translation contributed 1.3%. Management noted healthy underlying demand and strengthening order momentum. Ingersoll Rand also reported double-digit order growth through the first four weeks of July, supported by the realization of longer-cycle orders that had been delayed during the first half and continued strength in short-to-medium-cycle demand.Segmental PerformanceIndustrial Technologies and Services generated revenues of $1.62 billion, up 8.7% year over year and accounting for about 79% of total revenues. Organic revenues increased 4.2%, with positive growth across all regions. Acquisitions and foreign currency added 2.8% and 1.7%, respectively. The segment recorded a book-to-bill ratio of 1.0, indicating that quarterly orders were broadly aligned with revenues.The segment's adjusted EBITDA increased 1.7% to $434.5 million, while its margin contracted 180 basis points to 26.8%. Organic orders were approximately flat as strong compressor activity, particularly in North America, was offset by the timing of longer-cycle blower and vacuum orders in Europe and continued pressure in the Middle East.Precision and Science Technologies recorded revenues of $426.7 million, up 7.7%. Organic revenues increased 3.9%, while acquisitions and currency contributed 2.9% and 0.9%, respectively. Organic orders rose 7.4%, led by low-double-digit growth in Life Sciences Technologies and mid-single-digit growth in Precision Technologies.The segment's adjusted EBITDA increased 15.2% to $134.5 million. Its adjusted EBITDA margin expanded 200 basis points to 31.5%, reflecting strong operational execution supported by the Ingersoll Rand Execution Excellence system.Ingersoll Rand Inc. Price, Consensus and EPS Surprise Ingersoll Rand Inc. price-consensus-eps-surprise-chart | Ingersoll Rand Inc. QuoteIngersoll Rand's Margin ProfileThe company’s total adjusted EBITDA increased 2.1% year over year to $519.9 million. However, the adjusted EBITDA margin contracted 160 basis points to 25.4%. The decline reflected challenges in offsetting inflation with pricing, primarily in China, continued commercial investments to support growth and higher corporate costs.In the quarter, IR’s cost of sales increased 11.6% to $1.19 billion, while selling and administrative expenses rose 8% to $400.8 million. Adjusted net income increased to $339.3 million from $325.2 million, though the adjusted net income margin declined to 16.6% from 17.2%.Ingersoll Rand's Cash Flow and LiquidityCash provided by operating activities totaled $295.9 million in the second quarter, up from $245.7 million in the year-ago quarter. Capital expenditures declined to $27 million from $35.3 million, lifting free cash flow to $268.9 million from $210.4 million. The free cash flow margin improved 200 basis points to 13.1%.IR ended the quarter with $3.8 billion in available liquidity, including $1.17 billion in cash and $2.6 billion of undrawn revolving credit capacity. The company paid out dividends of $8 million and repurchased shares worth $240 million. It also deployed $110 million toward acquisitions.Long-term debt (less of current maturities) was $4.07 billion, lower than $4.78 billion recorded at the end of 2025. Net debt to adjusted EBITDA remained at 1.7 times.IR's 2026 OutlookIngersoll Rand raised its 2026 revenue growth outlook to 4.5-6.5%. The forecast assumes organic growth of 1-3%, an approximately 1% currency benefit and a roughly 2.5% contribution from acquisitions.The company maintained its adjusted EBITDA guidance of $2.13-$2.19 billion and adjusted earnings forecast of $3.45-$3.57 per share. Management projects adjusted earnings to be near the high end of this range. Free cash flow conversion is projected at approximately 95% of adjusted net income.Ingersoll Rand's M&A PipelineThe company completed the acquisition of a U.S.-based blower manufacturer with approximately $50 million in annual revenues. The transaction expands Ingersoll Rand's blower technologies and aftermarket capabilities.IR also entered into a deal to acquire Fai Filtri, an Italian industrial filtration company with about $30 million in annual revenues, with closing expected in the fourth quarter. The acquisition pipeline includes more than 200 companies, with 11 additional transactions at the letter-of-intent phase.Zacks Rank and Stocks to ConsiderThe company currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are discussed below:Applied Industrial Technologies AIT carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Applied Industrial’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 4.0%. In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2026 bottom line has inched up 0.1%.RBC Bearings Incorporated RBC presently carries a Zacks Rank of 2. RBC Bearings’ earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 6.2%. In the past 60 days, the Zacks Consensus Estimate for RBC’s fiscal 2027 earnings has increased 0.8%.Generac Holdings GNRC currently carries a Zacks Rank of 2. Generac Holdings’ earnings topped the consensus estimate twice and missed on the other two occasions in the trailing four quarters. The average earnings surprise was 7.4%. In the past 60 days, the Zacks Consensus Estimate for GNRC’s 2026 earnings has increased 0.4%. 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