Allegion plc (ALLE - Free Report) reported better-than-expected results for third-quarter 2018.
Earnings/Revenues
Quarterly adjusted earnings came in at $1.23 per share, outpacing the Zacks Consesus Estimate of $1.21. The bottom line also came in 20.6% higher than the year-ago tally. This stellar performance was backed by solid revenues, price-realization initiatives, increased productivity and diligent cost-cutting moves.
Revenues in the reported quarter came in at $711.5 million, up 16.8% year over year. The top line also exceeded the Zacks Consensus Estimate of $699 million. Revenues improved 8.5% year over year on an organic basis. The company stated that adverse impacts of unfavorable foreign exchange movements were offset by solid end-market sales and acquisition benefits in the reported quarter.
Segmental Break-Up
Revenues in the Americas segment rose 16.5% year over year to $530.1 million. The EMEIA (Europe, Middle East, India and Africa) segment’s revenues increased 7.4% to $134.4 million. Revenues in the Asia-Pacific segment surged 61.5% from the year-ago quarter to $47 million in the reported quarter.
Costs/Margins
In the Sep-end quarter, Allegion’s cost of sales escalated 20% year over year to $402.1 million. Gross profit grew 8.6% year over year, while gross margin shrunk 150 basis points (bps) to 43.5%.
Selling and administrative expenses jumped 13.4% year over year to $167.1 million.
Adjusted operating margin contracted 90 bps to 20% in the quarter under review.
Balance Sheet/Cash Flow
Exiting the third quarter, Allegion had cash and cash equivalents of $189.7 million, down from $466.2 recorded as of Dec 31 2018. Long-term debt stood at $1,417.7 million, down from $1,442.3 million recorded in 2017-end.
In the first nine months of 2018, the company generated net cash of $260.4 million from its operating activities, surging 53.2% from the year-ago period. Capital expenditures totaled $31.8 million against $33.7 million used in the comparable period last year.
Outlook
For 2018, Allegion has revised its earnings view from $4.35-$4.50 per share to $4.43-$4.50 per share range. On the other hand, revenues for the full year are now projected to be up13-13.5%, as against the prior view of 12.5-13.5%.
Stocks to Consider
Allegion currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Industrial Products sector are listed below:
Altra Industrial Motion Corp. sports a Zacks Rank #1 (Strong Buy). The company pulled off an average positive earnings surprise of 4.01% in the past four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Atkore International Group Inc. (ATKR - Free Report) flaunts a Zacks Rank of 1. The company generated an average positive earnings surprise of 24.46% in the trailing four quarters.
Donaldson Company, Inc. (DCI - Free Report) also sports a Zacks Rank of 1. The company delivered an average positive earnings surprise of 2.29% in the preceding four quarters.
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Allegion plc (ALLE - Free Report) reported better-than-expected results for third-quarter 2018.
Earnings/Revenues
Quarterly adjusted earnings came in at $1.23 per share, outpacing the Zacks Consesus Estimate of $1.21. The bottom line also came in 20.6% higher than the year-ago tally. This stellar performance was backed by solid revenues, price-realization initiatives, increased productivity and diligent cost-cutting moves.
Revenues in the reported quarter came in at $711.5 million, up 16.8% year over year. The top line also exceeded the Zacks Consensus Estimate of $699 million. Revenues improved 8.5% year over year on an organic basis. The company stated that adverse impacts of unfavorable foreign exchange movements were offset by solid end-market sales and acquisition benefits in the reported quarter.
Segmental Break-Up
Revenues in the Americas segment rose 16.5% year over year to $530.1 million. The EMEIA (Europe, Middle East, India and Africa) segment’s revenues increased 7.4% to $134.4 million. Revenues in the Asia-Pacific segment surged 61.5% from the year-ago quarter to $47 million in the reported quarter.
Costs/Margins
In the Sep-end quarter, Allegion’s cost of sales escalated 20% year over year to $402.1 million. Gross profit grew 8.6% year over year, while gross margin shrunk 150 basis points (bps) to 43.5%.
Selling and administrative expenses jumped 13.4% year over year to $167.1 million.
Adjusted operating margin contracted 90 bps to 20% in the quarter under review.
Balance Sheet/Cash Flow
Exiting the third quarter, Allegion had cash and cash equivalents of $189.7 million, down from $466.2 recorded as of Dec 31 2018. Long-term debt stood at $1,417.7 million, down from $1,442.3 million recorded in 2017-end.
In the first nine months of 2018, the company generated net cash of $260.4 million from its operating activities, surging 53.2% from the year-ago period. Capital expenditures totaled $31.8 million against $33.7 million used in the comparable period last year.
Outlook
For 2018, Allegion has revised its earnings view from $4.35-$4.50 per share to $4.43-$4.50 per share range. On the other hand, revenues for the full year are now projected to be up13-13.5%, as against the prior view of 12.5-13.5%.
Stocks to Consider
Allegion currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Industrial Products sector are listed below:
Altra Industrial Motion Corp. sports a Zacks Rank #1 (Strong Buy). The company pulled off an average positive earnings surprise of 4.01% in the past four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Atkore International Group Inc. (ATKR - Free Report) flaunts a Zacks Rank of 1. The company generated an average positive earnings surprise of 24.46% in the trailing four quarters.
Donaldson Company, Inc. (DCI - Free Report) also sports a Zacks Rank of 1. The company delivered an average positive earnings surprise of 2.29% in the preceding four quarters.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
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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