UPDATE 4-Ingersoll-Rand sees higher 2013 profit; housing to help

Fri Feb 1, 2013 10:32am EST

* Sees 2013 earnings of $3.45 to $3.65 per share

* Fourth-quarter profit tops Wall Street view

* Shares rise 2 percent to five-year high

Feb 1 (Reuters) - Ingersoll-Rand Plc reported a higher-than-expected fourth-quarter profit and said 2013 earnings could jump as much as 11 percent, boosted by an improving U.S. housing market, sending its shares to their highest point since late 2007.

The maker of air-conditioning and heating systems for businesses and homes, which plans to spin off its security business this year, said on Friday that it expected to earn $3.45 to $3.65 per share this year.

That figure excludes 40 cents to 60 cents per share of charges related to the spinoff, which is coming after pressure from activist investor Nelson Peltz. The security business makes products including Schlage and Kryptonite locks.

Ingersoll expects full-year revenue to rise 1 percent to 4 percent to a range of $14.2 billion to $14.6 billion. It forecast a 4 percent to 6 percent rise in residential products sales, reflecting "moderate improvement" in the housing market.

Last week United Technologies Corp, whose Carrier air conditioners compete with Ingersoll's Trane line, had also said an improving housing market could boost results this year .

Ingersoll's fourth-quarter net profit fell 2.7 percent to $235.6 million, or 78 cents per share, from $242.2 million, or 76 cents per share, a year earlier.

Factoring out earnings from discontinued operations and a tax gain, the company earned 76 cents per share, beating the analysts' average estimate of 70 cents, according to Thomson Reuters I/B/E/S.

"Margins were higher in every segment versus last year, driven by strong Security and Residential performance," said Vertical Research Partners analyst Jeff Sprague.

Ingersoll shares rose 2 percent to $52.45, their highest level since 2007.

As of Thursday's close, the stock had soared about 44 percent over the past year, vastly outpacing the roughly 13 percent rise of the broad Standard & Poor's 500 index.

A little more than half the gains came before Peltz disclosed his stake in May.

Revenue slipped 1 percent to $3.47 billion from $3.51 billion a year earlier, reflecting the sale of the company's Hussman refrigeration unit.

Ingersoll's earnings-per-share target for 2013 also reflects a 12-cent boost from a planned repurchase of about $2 billion in stock.