IR

S&P 500: +10.34 (+1.31%)

Ingersoll-Rand (IR) -1.29%
After the market closed yesterday, Ingersoll-Rand lowered guidance and halved its dividend in response to “an accelerated decline in business compared with prior expectations.”

Ingersoll-Rand expects first quarter EPS to be in the low range from a loss of 15 cents to breakeven – the current consensus estimate is a loss of $0.02 per share. The company also lowered its first quarter revenue expectations to reflect a 25 percent decrease from prior levels. For the full year, Ingersoll-Rand expects EPS to be $1.40 to $1.80 per share, $0.45 below its earlier forecast.

In order to enhance liquidity and pay down debt, Ingersoll-Rand will reduce its dividend by half, effective with the September 2009 dividend payment. The company expects the dividend reduction to save $140 million a year. In addition, a subsidiary intends to offer a benchmark-sized amount of senior notes and the parent will offer $300 million senior notes due 2012, exchangeable into cash and shares of Class A common shares.

Separately, Ingersoll-Rand also reconfirmed it will move to Ireland for more favorable tax treatment, amid concerns about changes in U.S. tax laws.


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Peter Lazaroff, Junior Analyst