NEW YORK (Bloomberg) - Bermuda-based Ingersoll-Rand Co., the maker of refrigerated truck equipment that's buying Trane Inc., said fourth-quarter profit fell 19 percent, hurt by a higher tax rate. Full-year profit may miss analysts' estimates because of acquisition costs.

Earnings from continuing operations trailed analysts' estimates, falling to $171 million, or 61 cents a share, from $210.1 million, or 68 cents, a year earlier. Revenue increased eight percent to $2.32 billion, the company said in a statement yesterday.

Chief executive officer Herbert Henkel worked to move Ingersoll-Rand away from its roots in machinery and recast it as a diversified industrial company by selling the Bobcat construction equipment unit and buying air-conditioner maker Trane during the quarter. Ingersoll-Rand recorded a $277 million asbestos liability charge in the just-ended quarter.

"They are making a large acquisition that has long-term potential, but also has some near-term issues because the markets Trane serves are becoming more suspect," said Eli Lustgarten, an analyst at Independence, Ohio-based Longbow Research who rates the shares "neutral" and doesn't own any. "Residential construction is already problematic, and non-residential construction is okay now, but all evidence says it will slow." The average of 14 analyst estimates compiled by Bloomberg was for profit of 99 cents a share. Analysts projected sales of $2.28 billion. In October, the company forecast profit of 94 cents to 99 cents on revenue gains of 5 percent to seven percent.

Ingersoll-Rand, which operates from Montvale, New Jersey, fell 49 cents, or 1.2 percent, $39.50 at 8:28 a.m. before the start of regular New York Stock Exchange composite trading. The shares have lost 14 percent so far this year.

Per-share profit in the period was cut 18 cents by a reduction in foreign tax credits, and increased reserves for anticipated tax penalties and interest related to taxes dating from before 2001, the company said.

Ingersoll-Rand is being audited by the US Internal Revenue Service over the way it classified some debt and its reincorporation in Bermuda.

Ingersoll-Rand in November completed its sale of Bobcat and other machinery units to South Korea's Doosan Infracore Co. for $4.9 billion. The proceeds from that sale will be put toward the $9.95 billion purchase of Trane, which is expected to close in the first half of the year.

"The fourth quarter of 2007 included several significant actions which taken together will complete our portfolio transformation," Mr. Henkel said in the statement.

Including the gain from the Bobcat sale, fourth-quarter net income jumped to $2.52 billion, or $9.06 a share, from $222 million, or 72 cents, a year earlier.