NEW YORK (TheStreet) -- Ingersoll-Rand (NYSE:IR) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 223.2% when compared to the same quarter one year prior, rising from -$77.60 million to $95.60 million.
- Net operating cash flow has significantly increased by 126.24% to $16.40 million when compared to the same quarter last year. In addition, INGERSOLL-RAND PLC has also vastly surpassed the industry average cash flow growth rate of -68.48%.
- The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
- INGERSOLL-RAND PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INGERSOLL-RAND PLC reported lower earnings of $0.66 versus $2.24 in the prior year. This year, the market expects an improvement in earnings ($3.01 versus $0.66).
- IR, with its decline in revenue, underperformed when compared the industry average of 16.4%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
--Written by a member of TheStreet Ratings Staff. TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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