Earnings wrap-up: IR, ACI, TROW

Ingersoll-Rand (IR) +14.12%
Despite total revenues declining 23% during the second-quarter and missing analysts’ estimates, IR’s cost controls drove better-than-expected productivity improvements and helped the diversified equipment maker deliver earnings that beat analysts’ projections.

The company expects lower demand in most of its major markets for the rest of the year; however, management sees some tentative positive signs in the residential HVAC (heating, ventilation, and air-conditioning) market, North American trailers, and China operations. Still, the nonresidential construction and European markets remain challenging.


Arch Coal (ACI) +7.53%
Arch Coal CEO Steven Leer said the coal market has “reached a bottom” and that there were signs of increased demand in the latter half of the second quarter.

These comments helped investors shrug off a bigger-than-expected loss and a cut to the company’s 2009 sales forecast. Arch Coal is continuing “aggressive efforts to reduce operating costs and capital spending across the organization to ensure profitability despite extremely weak market conditions.

T. Rowe Price Group (TROW) -1.75%
TROW’s earnings fell less than expected thanks to $3.5 billion of investor deposits during the second quarter and the recent market rally boosted the value of assets under management. Revenue fell 25% from a year earlier due to a 27% drop in investment advisory fees.

The amount of money TROW manages for clients dipped 19% from a year earlier to $315.6 billion, but assets rose 17% since March 31. Money poured into the company’s target-date funds to the tune of $1.8 billion, reaching $33.1 billion and 10% of total fund assets.

CEO James Kennedy said, “We’re beyond the panic stage in the market and beyond the worst in the economy. A big question is the consumer, with so much debt and without the capacity to turn to credit cards or home-equity loans.”

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Peter J. Lazaroff, Investment Analyst