Shares of Ingersoll-Rand Co. jumped Wednesday after the diversified manufacturer reported it fell to a first-quarter loss which nonetheless topped Wall Street expectations, and forecast better-than-expected 2009 results.
The Bermuda-based company's adjusted loss from continuing operations amounted to 6 cents per share, which handily beat Wall Street's target of a 12-cent per share loss. The results also came in ahead of the low end of its own first-quarter forecast of breakeven per share to a loss of 15 cents per share.
On Wednesday, Ingersoll also forecast full-year earnings from continuing operations in a range of $1.40 to $1.90, excluding 11 cents per share in restructuring expenses. In late March, Ingersoll had reduced its full-year projection for earnings-per-share from continuing operations from a prior range of between $1.85 and $2.25 to an implied estimate of $1.40.
Wall Street analysts expect a full-year profit of $1.40 per share.
Analyst Nicholas P. Heymann of Sterne Agee called Ingersoll's first-quarter results a "modest positive surprise" and said they reflect Ingersoll's ability to "finally begin to achieve and bring expanded restructuring benefits" to its bottom line.
In a note to investors he raised his 2009 estimate by 20 cents to $1.60 per share and increased his estimate for next year to $1.80 per share from $1.65 per share.
Heymann said he had previously overestimated interest costs for Ingersoll's debt and underestimated benefits from restructuring.
Analysts surveyed by Thomson expect earnings for 2010 of $1.55 per share.
Heymann raised his rating to "Buy" from "Neutral" and increased his six-to-12-month price target to $23 from $16.
Analyst Jeffrey D. Hammond of KeyBanc Capital Markets said in a note that investors will focus on forward guidance, which came in ahead of both his and Street expectations.
"While business broadly remains challenged across IR's businesses, we believe the company has been successful in managing expectations, which should support upside as investors gain confidence that most of the bad news is out," Hammond said.
Shares advanced $2.36, or 14 percent, to $19.09 in afternoon trading.