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Why Is Allegion (ALLE) Up 3.8% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Allegion PLC (ALLE - Free Report) . Shares have added about 3.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Allegion Misses Earnings & Revenues Estimates in Q4
Allegion’s fourth-quarter 2016 adjusted earnings came in at $0.81 per share, missing the Zacks Consensus Estimate of $0.87 by 6.9%. Adjusted earnings were down 9% from the prior-year quarter.
Quarterly net revenue of $569.7 million missed the consensus mark of $572.3 million by 0.5%. The figure, however, increased 4.4% on a year-over-year basis on organic growth that was slightly offset by foreign currency impact.
Revenues were also up 5.2% on an organic basis driven by strong performance in the Americas segment, reflecting continued strength in the region’s channel initiatives, improving end markets and synergies from product introductions.
The company’s adjusted effective tax rate for the fourth quarter of 2016 was 9.6%, compared with 9% in 2015.
Segment Details
Revenues at the Americas segment rose 7% year over year to $410 million, driven by strong growth in both the mechanical and electronic product categories.
Organic revenues also increased 7% on the back of high-single digit non-residential and mid-single digit residential growth.
The EMEIA (Europe, Middle East, India and Africa) segment was up 0.2% to $129.4 million, owing to continued pricing performance offset by unfavorable foreign currency.
Organically revenues grew 1.4% driven by solid growth in portable security and steady improvement in the SimonsVoss business.
Revenues at the Asia-Pacific segment were down 8% year over year to $30.3 million, due to the divestiture of the system integration business.
Organically, revenues were down 0.7% primarily due to timing of orders as well as large non-recurring projects in the fourth quarter of 2015.
Margins
Adjusted operating margin was 17.9%, down 110 basis points (bps) year over year due to a $15 million-environmental remediation charge levied on the Americas segment.
Financials
Allegion ended the quarter with cash and cash equivalents of $312.4 million, as of Dec 31, 2016, compared with $199.7 million as of Dec 31, 2015.
The company generated $377.5 million in cash from operating activities in 2016 compared with $257 million in 2015. Available cash flow for 2016 was $335 million, an increase of 50.8% from the prior year, primarily driven by an increase in net earnings.
Capital expenditures totaled $42.5 million in 2016, compared with $35.2 million in 2015.
During fourth-quarter 2016, Allegion repurchased 850,000 shares under its previously authorized repurchase program of $55 million.
2016 Results
The company’s 2016 adjusted earnings of $3.34 per share missed the Zacks Consensus Estimate of $3.40 by 1.8% but were up 10% from the prior-year figure of $3.03. Adjusted earnings were below the projected range of $3.38 to $3.43.
Net sales of $2.24 billion in the year were in line with the Zacks Consensus Estimate. Net sales increased 8.2% year over year on positive organic growth and contribution from acquisitions that were slightly offset by divestitures. Revenues were within the projected range of 8% to 9%.
Organically revenues were up 5.8% in 2016. Full-year organic revenues (excluding currency and acquisitions) were also within the projected range of 5% to 6%.
2017 Guidance
Reported and adjusted EPS for full-year 2017 is projected in the range of $3.55 to $3.70, an increase of 6.3% to 10.8% from the 2016 level.
The company expects full-year 2017 reported and organic revenues growth of 5.5% to 6.5% when compared to 2016.
Organic growth in the Asia-Pacific region is estimated at around 10% to 12%, and total revenue growth is estimated to be 7% to 9%, including the currency impact.
Organic growth in the EMEIA region is estimated at roughly 1% to 3% while total revenue growth is estimated to be -1% to 1%, accounting for the currency impact.
Organic growth in the Asia-Pacific region is estimated in the range of 10% to 12%, and total revenue growth is estimated to be 7% to 9%, including the currency impact.
Full-year effective tax rate from continuing operations is anticipated in the 19% to 20% range.
Available cash flow for 2017 is anticipated in the $300 million to $320 million range, inclusive of a $50 million voluntary pension funding.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter.
At this time, Allegion's stock has a great Growth Score of 'A', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for inline return from the stock in the next few months.
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Why Is Allegion (ALLE) Up 3.8% Since the Last Earnings Report?
A month has gone by since the last earnings report for Allegion PLC (ALLE - Free Report) . Shares have added about 3.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Allegion Misses Earnings & Revenues Estimates in Q4
Allegion’s fourth-quarter 2016 adjusted earnings came in at $0.81 per share, missing the Zacks Consensus Estimate of $0.87 by 6.9%. Adjusted earnings were down 9% from the prior-year quarter.
Quarterly net revenue of $569.7 million missed the consensus mark of $572.3 million by 0.5%. The figure, however, increased 4.4% on a year-over-year basis on organic growth that was slightly offset by foreign currency impact.
Revenues were also up 5.2% on an organic basis driven by strong performance in the Americas segment, reflecting continued strength in the region’s channel initiatives, improving end markets and synergies from product introductions.
The company’s adjusted effective tax rate for the fourth quarter of 2016 was 9.6%, compared with 9% in 2015.
Segment Details
Revenues at the Americas segment rose 7% year over year to $410 million, driven by strong growth in both the mechanical and electronic product categories.
Organic revenues also increased 7% on the back of high-single digit non-residential and mid-single digit residential growth.
The EMEIA (Europe, Middle East, India and Africa) segment was up 0.2% to $129.4 million, owing to continued pricing performance offset by unfavorable foreign currency.
Organically revenues grew 1.4% driven by solid growth in portable security and steady improvement in the SimonsVoss business.
Revenues at the Asia-Pacific segment were down 8% year over year to $30.3 million, due to the divestiture of the system integration business.
Organically, revenues were down 0.7% primarily due to timing of orders as well as large non-recurring projects in the fourth quarter of 2015.
Margins
Adjusted operating margin was 17.9%, down 110 basis points (bps) year over year due to a $15 million-environmental remediation charge levied on the Americas segment.
Financials
Allegion ended the quarter with cash and cash equivalents of $312.4 million, as of Dec 31, 2016, compared with $199.7 million as of Dec 31, 2015.
The company generated $377.5 million in cash from operating activities in 2016 compared with $257 million in 2015. Available cash flow for 2016 was $335 million, an increase of 50.8% from the prior year, primarily driven by an increase in net earnings.
Capital expenditures totaled $42.5 million in 2016, compared with $35.2 million in 2015.
During fourth-quarter 2016, Allegion repurchased 850,000 shares under its previously authorized repurchase program of $55 million.
2016 Results
The company’s 2016 adjusted earnings of $3.34 per share missed the Zacks Consensus Estimate of $3.40 by 1.8% but were up 10% from the prior-year figure of $3.03. Adjusted earnings were below the projected range of $3.38 to $3.43.
Net sales of $2.24 billion in the year were in line with the Zacks Consensus Estimate. Net sales increased 8.2% year over year on positive organic growth and contribution from acquisitions that were slightly offset by divestitures. Revenues were within the projected range of 8% to 9%.
Organically revenues were up 5.8% in 2016. Full-year organic revenues (excluding currency and acquisitions) were also within the projected range of 5% to 6%.
2017 Guidance
Reported and adjusted EPS for full-year 2017 is projected in the range of $3.55 to $3.70, an increase of 6.3% to 10.8% from the 2016 level.
The company expects full-year 2017 reported and organic revenues growth of 5.5% to 6.5% when compared to 2016.
Organic growth in the Asia-Pacific region is estimated at around 10% to 12%, and total revenue growth is estimated to be 7% to 9%, including the currency impact.
Organic growth in the EMEIA region is estimated at roughly 1% to 3% while total revenue growth is estimated to be -1% to 1%, accounting for the currency impact.
Organic growth in the Asia-Pacific region is estimated in the range of 10% to 12%, and total revenue growth is estimated to be 7% to 9%, including the currency impact.
Full-year effective tax rate from continuing operations is anticipated in the 19% to 20% range.
Available cash flow for 2017 is anticipated in the $300 million to $320 million range, inclusive of a $50 million voluntary pension funding.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter.
Allegion PLC Price and Consensus
Allegion PLC Price and Consensus | Allegion PLC Quote
VGM Scores
At this time, Allegion's stock has a great Growth Score of 'A', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for inline return from the stock in the next few months.