Summary
Trane Technologies plc (TT), previously reported as Ingersoll-Rand plc, filed its 10-Q for the period ending June 30, 2013, showing modest revenue growth and a decline in net earnings compared to the prior year's period. For the three months ended June 30, 2013, net revenues increased by 2.9% to $3.93 billion, but net earnings attributable to ordinary shareholders decreased to $317.2 million from $365.8 million in the same period of 2012. The six-month period also saw a slight revenue increase of 1.0% to $7.05 billion, with net earnings falling to $405.2 million from $461.4 million. A significant development highlighted is the ongoing strategic plan to spin off the commercial and residential security businesses into a separate entity, Allegion plc, expected to be completed by year-end 2013. The company also undertook a substantial debt refinancing in June 2013, issuing $1.55 billion in Senior Notes to redeem older, higher-interest debt and fund spin-off expenses. Despite operational pressures and increased investment spending, the company increased its quarterly dividend and continued its share repurchase program.
Financial Highlights
50 data points| Revenue | $3.40B |
| Cost of Revenue | $2.38B |
| Gross Profit | $1.02B |
| SG&A Expenses | $633.40M |
| Operating Income | $387.50M |
| Interest Expense | $61.90M |
| Net Income | $317.20M |
| EPS (Basic) | $1.07 |
| EPS (Diluted) | $1.05 |
| Shares Outstanding (Basic) | 297.50M |
| Shares Outstanding (Diluted) | 301.20M |
Key Highlights
- 1Net revenues for the second quarter of 2013 increased 2.9% to $3.93 billion, while six-month revenues grew 1.0% to $7.05 billion.
- 2Net earnings attributable to Ingersoll-Rand plc ordinary shareholders decreased to $317.2 million for Q2 2013 from $365.8 million in Q2 2012, and to $405.2 million for the first six months from $461.4 million in the prior year.
- 3The company announced plans to spin off its commercial and residential security businesses into a new entity, Allegion plc, with completion anticipated by year-end 2013.
- 4In June 2013, the company issued $1.55 billion in Senior Notes, with proceeds used to redeem $600 million of 6.000% Senior Notes due 2013 and $655 million of 9.500% Senior Notes due 2014.
- 5Operating margin for Q2 2013 declined slightly to 12.3% from 12.5% in Q2 2012, attributed to unfavorable product mix and increased investment spending, including spin-off costs.
- 6The company increased its quarterly dividend to $0.21 per share starting in March 2013 and repurchased $477.6 million of its shares in the first six months of 2013.
- 7Significant ongoing legal proceedings related to IRS tax audits for 2001-2006 periods involve substantial potential tax liabilities, though the company contests these and believes it is adequately reserved.