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Trane Technologies (TT) Beats on Q2 Earnings, Ups 2021 View

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Trane Technologies plc (TT - Free Report) reported better-than-expected second-quarter 2021 results.

Adjusted EPS of $1.92 beat the Zacks Consensus Estimate by 1.1% and increased 51.2% year over year. Revenues of $3.8 billion surpassed the consensus mark by 2.3% and increased 22% year over year on a reported basis and 18% organically. Bookings were up 34% year over year on a reported basis and 30% organically, to $4.4 billion.

The company’s shares have gained 79.3% over the past year against 28.7% decline of the industry it belongs to.

Revenues and Bookings Up in all Segments

The Americas segment’s revenues of $3 billion increased 21% year over year on a reported basis and 19% on an organic basis. Bookings increased 31% on a reported basis and 29% organically, to $3.4 billion.

Europe, Middle East and Africa (EMEA) segment’s revenues came in at $523.2 million, up 40% year over on a reported basis and 28% organically. Bookings were up 67% on a reported basis and 53% organically, to $629.8 million.

Revenues from the Asia Pacific segment were up 8% year over year on a reported basis and 2% on an organic basis, to $334.9 million. Bookings of $394.9 million increased 18% on a reported basis and 12% organically.

Strong Margin Performance

Adjusted EBITDA came in at $731.4 million, up 34.6% year over year. Adjusted EBITDA margin improved 180 basis points (bps) to 19.1%. Adjusted operating income of $656.3 million increased 39% year over year with adjusted operating margin expanding 210 bps to 17.1%.

Key Balance Sheet and Cash Flow Figures

Trane ended the quarter with cash and cash equivalents balance of $2.9 billion compared with $2.8 billion at the end of the previous quarter. Long-term debt was $4.5 billion, flat sequentially.

The company generated $488.9 million of cash from operating activities and capital expenditures were $33.6 million. Free cash flow was $460.5 million.

Raised 2021 Guidance

Trane now expects revenues to increase 13.5% on a reported basis and 11% on an organic basis, compared with the previous expectation of an increase of 10.5% year over year on a reported basis and 9% on an organic basis. Adjusted EPS is now expected to be $6.05, up 36% year over year. Adjusted EPS was previously expected to be $6, up 35% year over year.

Trane currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Business Services Companies

Equifax (EFX - Free Report) reported better-than-expected second-quarter 2021 results. Adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and improved 23.8% on a year-over-year basis. Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and improved 25.6% year over year.

IHS Markit’s (INFO - Free Report) second-quarter fiscal 2021 adjusted earnings per share of 81 cents beat the consensus mark by 1.3% and increased 17.4% on a year-over-year basis. Total revenues came in at $1.2 billion, surpassing the consensus mark by 3.8% and increasing 15% from the year-ago quarter.

Omnicom (OMC - Free Report) reported second-quarter 2021 adjusted earnings of $1.46 per share that beat the consensus mark by 9.8% and increased 58.7% year over year. Total revenues of $3.6 billion surpassed the consensus estimate by 6.7% and increased 27.5% year over year.


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