Allegion plc’s (ALLE - Free Report) second-quarter 2017 adjusted earnings came in at $1.11 per share, surpassing the Zacks Consensus Estimate of $1.00 by 11%. Adjusted earnings were up 12.1% from the prior-year quarter.
Quarterly net revenue of $627 million beat the consensus mark of $613.4 million by 2.2%. The figure increased 7.2% on a year-over-year basis on the back of strong organic growth and benefits from acquisitions that were slightly offset by foreign currency impact. Revenues were also up 6.2% on an organic basis.
Segment Details
Revenues at the Americas segment rose 7.4% year over year to $468.6 million, driven by acquisitions, favorable price, low double-digit organic growth in residential markets, and stellar performance in non-residential markets. Organic revenues also increased 6.1% year over year.
The EMEIA (Europe, Middle East, India and Africa) segment was up 6.3% to $129.2 million, driven by strong performance of the portable security business and solid pricing. Organically, revenues were up 6.3% on a year-over-year basis.
Revenues at the Asia-Pacific segment rose 9% year over year to $29.2 million driven by acquisitions and solid electronic lock sales. Organically, revenues were up 7.8%.
Allegion PLC Price, Consensus and EPS Surprise
Margins
Adjusted operating margin was 21.7%, up 20 basis points (bps) year over year owing to solid price performance, volume leverage and productivity. Adjusted EBITDA margin was down 10 bps to 24.1%.
Financials
Allegion ended the quarter with cash and cash equivalents of $245.5 million, as of Jun 30, 2017, compared with $312.4 million as of Dec 31, 2016.
Available cash flow as of Jun 30, 2016 was $42.6 million, lower than $84.7 million in the second quarter of 2016, due to a discretionary pension funding payment of $50 million in the first quarter.
Capital expenditures totaled $21.4 million in the first half of 2017, compared with $16.5 million a year ago.
During second-quarter 2017, Allegion repurchased 0.4 million shares for approximately $30 million under its previously authorized repurchase program of $500 million.
2017 Guidance Updated
Adjusted earnings per share are now expected in the range of $3.65–$3.80 versus the prior expectation of $3.60–$3.70.
The company expects full-year 2017 revenue growth of 6.5% to 7.5% on a year-over-year basis, higher than 5.5% to 6.5% expected earlier. Organically, revenues are expected in the 6% to 7% range, compared to 6.5% to 7.5% expected earlier.
Full-year adjusted effective tax rate is anticipated in the 18.5% to 19% range.
Available cash flow is targeted in the $300 to $320 million band (including $50 million in discretionary pension funding payment).
Zacks Rank & Other Key Picks
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few other top-ranked stocks in the industry are Lakeland Industries, Inc. (LAKE - Free Report) , Ituran Location and Control Ltd. (ITRN - Free Report) and MSA Safety Incorporporated (MSA - Free Report) .
Lakeland sports a Zacks Rank #1. Fiscal 2018 earnings for Lakeland are expected to increase 56.6%.
Ituran, a Zacks Rank #2 stock, is expected to witness 32.7% growth in 2017 earnings.
MSA Safety, also a Zacks Rank #2 stock, is expected to see a 17.5% rise in 2017 earnings.
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Allegion plc’s (ALLE - Free Report) second-quarter 2017 adjusted earnings came in at $1.11 per share, surpassing the Zacks Consensus Estimate of $1.00 by 11%. Adjusted earnings were up 12.1% from the prior-year quarter.
Quarterly net revenue of $627 million beat the consensus mark of $613.4 million by 2.2%. The figure increased 7.2% on a year-over-year basis on the back of strong organic growth and benefits from acquisitions that were slightly offset by foreign currency impact. Revenues were also up 6.2% on an organic basis.
Segment Details
Revenues at the Americas segment rose 7.4% year over year to $468.6 million, driven by acquisitions, favorable price, low double-digit organic growth in residential markets, and stellar performance in non-residential markets. Organic revenues also increased 6.1% year over year.
The EMEIA (Europe, Middle East, India and Africa) segment was up 6.3% to $129.2 million, driven by strong performance of the portable security business and solid pricing. Organically, revenues were up 6.3% on a year-over-year basis.
Revenues at the Asia-Pacific segment rose 9% year over year to $29.2 million driven by acquisitions and solid electronic lock sales. Organically, revenues were up 7.8%.
Allegion PLC Price, Consensus and EPS Surprise
Margins
Adjusted operating margin was 21.7%, up 20 basis points (bps) year over year owing to solid price performance, volume leverage and productivity. Adjusted EBITDA margin was down 10 bps to 24.1%.
Financials
Allegion ended the quarter with cash and cash equivalents of $245.5 million, as of Jun 30, 2017, compared with $312.4 million as of Dec 31, 2016.
Available cash flow as of Jun 30, 2016 was $42.6 million, lower than $84.7 million in the second quarter of 2016, due to a discretionary pension funding payment of $50 million in the first quarter.
Capital expenditures totaled $21.4 million in the first half of 2017, compared with $16.5 million a year ago.
During second-quarter 2017, Allegion repurchased 0.4 million shares for approximately $30 million under its previously authorized repurchase program of $500 million.
2017 Guidance Updated
Adjusted earnings per share are now expected in the range of $3.65–$3.80 versus the prior expectation of $3.60–$3.70.
The company expects full-year 2017 revenue growth of 6.5% to 7.5% on a year-over-year basis, higher than 5.5% to 6.5% expected earlier. Organically, revenues are expected in the 6% to 7% range, compared to 6.5% to 7.5% expected earlier.
Full-year adjusted effective tax rate is anticipated in the 18.5% to 19% range.
Available cash flow is targeted in the $300 to $320 million band (including $50 million in discretionary pension funding payment).
Zacks Rank & Other Key Picks
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few other top-ranked stocks in the industry are Lakeland Industries, Inc. (LAKE - Free Report) , Ituran Location and Control Ltd. (ITRN - Free Report) and MSA Safety Incorporporated (MSA - Free Report) .
Lakeland sports a Zacks Rank #1. Fiscal 2018 earnings for Lakeland are expected to increase 56.6%.
Ituran, a Zacks Rank #2 stock, is expected to witness 32.7% growth in 2017 earnings.
MSA Safety, also a Zacks Rank #2 stock, is expected to see a 17.5% rise in 2017 earnings.
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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