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Why Is Trane Technologies (TT) Up 1.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Trane Technologies (TT - Free Report) . Shares have added about 1.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Trane Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Trane Technologies Q2 Earnings & Revenues Top Estimates
Adjusted EPS of $2.16 surpassed the Zacks Consensus Estimate by 2.9% and increased 12.5% year over year. Revenues of $4.2 billion beat the consensus mark by 1.2% and increased 9.4% year over year on a reported basis and 11% organically.
Strong results in the quarter were driven by robust demand. Bookings were up 5% year over year on a reported basis and 6% organically, to $4.3 billion.
Revenues and Bookings
The Americas segment’s revenues of $3.4 billion increased 14% year over year on a reported basis and 13% on an organic basis. Bookings increased 11% on a reported basis and 10% organically, to $3.7 billion.
Europe, Middle East and Africa (EMEA) segment’s revenues came in at $521.6 million, flat year over year on a reported basis but up 11% organically. Bookings were down 22% year over year on a reported basis and 12% organically at 493.6 million.
Revenues from the Asia Pacific segment were down 16% year over year on a reported basis and 12% on an organic basis, to $282.5 million. Bookings of $437.4 million increased 11% on a reported basis and 16% organically.
Margin Performance
Adjusted EBITDA came in at $786 million, up 8% year over year. Adjusted EBITDA margin declined 40 basis points (bps) to 18.7%. Adjusted operating income of $707 million increased 8% year over year with adjusted operating margin declining 20 bps to 16.9%.
Key Balance Sheet and Cash Flow Figures
Trane ended the quarter with a cash balance of $1.1 billion compared with $1.3 billion at the end of the previous quarter. Debt balance was $4.8 billion, flat with the previous quarter’s tally.
The company generated $418 million of cash from operating activities and a free cash flow of $387 million through Jun 30, 2022.
Raised 2022 Guidance
Trane expects revenues to increase 11% on a reported basis and 12% on an organic basis compared with the prior expectation of a 9% increase on a reported basis and 10% on an organic basis.
Adjusted EPS is expected to be between $7.05 and $7.15 compared with the previously expected range of $6.95-$7.15.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Trane Technologies has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Trane Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Trane Technologies (TT) Up 1.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Trane Technologies (TT - Free Report) . Shares have added about 1.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Trane Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Trane Technologies Q2 Earnings & Revenues Top Estimates
Trane Technologies reported better-than-expected second-quarter 2022 results.
Adjusted EPS of $2.16 surpassed the Zacks Consensus Estimate by 2.9% and increased 12.5% year over year. Revenues of $4.2 billion beat the consensus mark by 1.2% and increased 9.4% year over year on a reported basis and 11% organically.
Strong results in the quarter were driven by robust demand. Bookings were up 5% year over year on a reported basis and 6% organically, to $4.3 billion.
Revenues and Bookings
The Americas segment’s revenues of $3.4 billion increased 14% year over year on a reported basis and 13% on an organic basis. Bookings increased 11% on a reported basis and 10% organically, to $3.7 billion.
Europe, Middle East and Africa (EMEA) segment’s revenues came in at $521.6 million, flat year over year on a reported basis but up 11% organically. Bookings were down 22% year over year on a reported basis and 12% organically at 493.6 million.
Revenues from the Asia Pacific segment were down 16% year over year on a reported basis and 12% on an organic basis, to $282.5 million. Bookings of $437.4 million increased 11% on a reported basis and 16% organically.
Margin Performance
Adjusted EBITDA came in at $786 million, up 8% year over year. Adjusted EBITDA margin declined 40 basis points (bps) to 18.7%. Adjusted operating income of $707 million increased 8% year over year with adjusted operating margin declining 20 bps to 16.9%.
Key Balance Sheet and Cash Flow Figures
Trane ended the quarter with a cash balance of $1.1 billion compared with $1.3 billion at the end of the previous quarter. Debt balance was $4.8 billion, flat with the previous quarter’s tally.
The company generated $418 million of cash from operating activities and a free cash flow of $387 million through Jun 30, 2022.
Raised 2022 Guidance
Trane expects revenues to increase 11% on a reported basis and 12% on an organic basis compared with the prior expectation of a 9% increase on a reported basis and 10% on an organic basis.
Adjusted EPS is expected to be between $7.05 and $7.15 compared with the previously expected range of $6.95-$7.15.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Trane Technologies has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Trane Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.