Allegion plc ALLE reported better-than-expected results for the first quarter on Friday.The company posted quarterly earnings of $1.86 per share which beat the analyst consensus estimate of $1.67 per share. The company reported quarterly sales of $941.90 million which beat the analyst consensus estimate of $919.64 million.Allegion affirmed its FY2025 adjusted EPS guidance of $7.65-$7.85 and affirmed revenue growth guidance of 1% to 3%.“Allegion is off to a strong start in 2025. I’m proud of our team’s execu ...

Financial Data and Key Metrics Changes - Q1 2025 revenue was $941.9 million, an increase of 5.4% compared to Q1 2024 [16] - Organic revenue increased by 4%, driven by favorable pricing and volume, particularly in the non-residential business in The Americas [17] - Adjusted earnings per share (EPS) for Q1 was $1.86, up $0.31 or 20% year-over-year [18] - Available cash flow was $83.4 million, up nearly 250% compared to the previous year [20] Business Line Data and Key Metrics Changes - The Americas segment reported revenue of $757.8 million, up 6.8% on a reported basis and 4.9% organically [21] - The non-residential business in The Americas saw high single-digit organic growth, while the residential business declined mid-single digits [23][24] - International segment revenue was $104.1 million, down 0.3% on a reported basis but up 0.9% organically [26] Market Data and Key Metrics Changes - The Americas experienced mid-single-digit growth and solid margin expansion, indicating strong demand and effective channel partnerships [7] - The residential market remains soft due to high mortgage rates and tariff uncertainties, with expectations to continue at low levels until a significant catalyst occurs [104] Company Strategy and Development Direction - The company is focused on capital allocation for growth, including organic investments and accretive acquisitions, having closed three acquisitions in 2025 [12][14] - Allegion is committed to maintaining its dividend policy, having announced its eleventh consecutive increase at the beginning of the year [15] - The company aims to offset tariff costs through pricing actions while remaining agile in response to market conditions [33][34] Management's Comments on Operating Environment and Future Outlook - Management affirmed the 2025 full-year outlook for adjusted EPS of $7.65 to $7.85, citing resilience in non-residential markets [9][31] - The company anticipates some headwinds in Q2 due to a lag in pricing actions relative to tariff impacts [43] - Positive internal indicators in the non-residential business and a strong aftermarket contribute to confidence in the full-year guidance [125] Other Important Information - Allegion's new product launches, including smart locks, are expected to drive growth in the electronics segment [10][11] - The company has a strong balance sheet with a net debt to adjusted EBITDA ratio of 1.6 times, supporting continued capital deployment [30] Q&A Session Summary Question: Inquiry about tariffs and pricing actions - Management acknowledged a potential lag between tariff impacts and pricing actions, expecting to cover tariff costs at the operating profit and EPS level for the full year [42][44] Question: Changes in institutional verticals and CapEx priorities - Management noted that institutional verticals like healthcare and education remain resilient, with a long tail for projects funded by municipal bonds [55][56] Question: Market dynamics and project paralysis - Management indicated that while some projects may be paused due to interest rate concerns, there is optimism for future project progression as rates stabilize [120] Question: Outlook for the residential market - Management expressed that the residential market is expected to remain soft due to high mortgage rates and construction costs, with a focus on aftermarket opportunities [104][106] Question: Pricing and productivity outlook - Management confirmed expectations for price and productivity to remain neutral for the year, despite fluctuations in quarterly performance [110][111]

Locks and access door company Allegion (ALLE 9.60%) stock had risen by 10.3% at 11 a.m. ET. The move comes after its first-quarter earnings report was released this morning. Here's what happened and why the stock looks like a great value.Allegion safely deliversIt's no secret that the residential housing market is under pressure from relatively high interest rates. The tariff turmoil threatens nearly all manufacturers, and they may be unable to pass on increased supply chain costs. There's also the threat o ...

Core Viewpoint - Allegion plc reported strong first-quarter 2025 results, with adjusted earnings per share of $1.86, exceeding estimates and showing a 20% year-over-year increase [1] Revenue Details - Total revenues reached $941.9 million, a 5.4% increase year over year, surpassing the Zacks Consensus Estimate of $932 million [1][2] - Organic revenues grew by 4%, primarily driven by robust performance in the non-residential business in the Americas [1] - Acquired assets contributed 1.8% to revenue growth, while foreign exchange negatively impacted revenues by 3% [2] Segment Performance - Allegion Americas revenues increased by 6.8% year over year to $757.8 million, accounting for 80.5% of total revenues, exceeding estimates [2] - Organic revenues in this segment rose by 4.9%, supported by high-single-digit growth in non-residential businesses [2] - Allegion International revenues slightly declined by 0.3% year over year to $184.1 million, but organic revenues grew by 0.9% due to pricing [3] Margin Profile - Cost of revenues increased by 3.4% year over year to $519.4 million, while gross profit rose by 8% to $422.5 million, leading to a gross margin increase of 110 basis points to 44.9% [4] - Adjusted EBITDA grew by 12.2% year over year to $228.0 million, with a margin increase of 140 basis points to 24.2% [4] - Adjusted operating income increased by 14.1% year over year to $196.4 million, with an adjusted margin of 22.7%, up 150 basis points [5] Balance Sheet and Cash Flow - At the end of Q1 2025, Allegion had cash and cash equivalents of $494.5 million, down from $503.8 million at the end of 2024, while long-term debt slightly decreased to $1.97 billion [6] - The company generated net cash of $104.5 million from operating activities, more than doubling year over year, with available cash flow of $83.4 million [7] - Allegion repurchased shares worth $40.0 million and paid dividends totaling $43.6 million, reflecting a 3.6% year-over-year increase [7] 2025 Outlook - Allegion has reaffirmed its 2025 guidance, expecting revenue growth of 1-3% and organic revenue growth of 1.5-3.5% [9] - Adjusted earnings are projected to be between $7.65 and $7.85 per share, with available cash flow estimated at 85-90% of adjusted net income [9]

Earnings Performance - Allegion reported quarterly earnings of $1.86 per share, exceeding the Zacks Consensus Estimate of $1.68 per share, and up from $1.55 per share a year ago, representing an earnings surprise of 10.71% [1] - The company posted revenues of $941.9 million for the quarter, surpassing the Zacks Consensus Estimate by 1.11%, and an increase from $893.9 million year-over-year [2] Market Comparison - Allegion shares have declined approximately 3.2% since the beginning of the year, while the S&P 500 has seen a decline of 8.6% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2 on revenues of $990.15 million, and for the current fiscal year, it is $7.69 on revenues of $3.86 billion [7] - The Zacks Industry Rank indicates that the Security and Safety Services sector is in the bottom 28% of over 250 Zacks industries, suggesting potential challenges ahead [8] Estimate Revisions - The estimate revisions trend for Allegion is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6]

Financial Performance - Net revenues for Q1 2025 increased to $941.9 million, up 5.9% from $893.9 million in Q1 2024[10] - Operating income rose to $196.4 million, reflecting a 14.1% increase compared to $172.1 million in the same period last year[10] - Net earnings attributable to Allegion plc reached $148.2 million, a 19.7% increase from $123.8 million in Q1 2024[10] - Basic earnings per share increased to $1.72, up 21.9% from $1.41 in Q1 2024[10] - Total comprehensive income attributable to Allegion plc for Q1 2025 was $184.8 million, significantly higher than $99.8 million in Q1 2024[10] - Net earnings for the three months ended March 31, 2025, were $148.2 million, an increase from $123.8 million for the same period in 2024[47] - The total equity of Allegion plc increased from $1,500.7 million at December 31, 2024, to $1,606.9 million at March 31, 2025[47] Assets and Liabilities - Total assets as of March 31, 2025, were $4,564.1 million, compared to $4,487.8 million at the end of 2024, marking a 1.7% increase[12] - As of March 31, 2025, total long-term debt was $1,972.0 million, a slight decrease from $1,977.6 million as of December 31, 2024[27] - The Company has an outstanding $209.4 million on its $250.0 million Term Facility and no balance on its $750.0 million Revolving Facility as of March 31, 2025[28] - Total current assets as of March 31, 2025, were $12.2 million for Allegion plc and $692.7 million for Allegion US Hold Co[118] - Total current liabilities as of March 31, 2025, were $50.4 million for Allegion plc and $805.8 million for Allegion US Hold Co[118] Cash Flow and Capital Expenditures - Cash and cash equivalents at the end of Q1 2025 were $494.5 million, down from $503.8 million at the beginning of the period[14] - Capital expenditures for Q1 2025 were $21.1 million, a decrease from $27.2 million in Q1 2024[14] - Net cash provided by operating activities increased by $53.4 million to $104.5 million in Q1 2025 compared to Q1 2024, driven by higher net earnings and lower working capital usage[103] - Net cash used in investing activities decreased by $15.4 million to $28.0 million in Q1 2025, primarily due to lower capital expenditures and reduced cash used for acquisitions[104] - Net cash used in financing activities increased by $11.3 million to $91.3 million in Q1 2025, mainly due to higher cash used for other financing activities[104] Segment Performance - Allegion Americas segment reported net revenues of $757.8 million, up from $709.3 million in 2024, while Allegion International segment revenues slightly decreased to $184.1 million from $184.6 million[66] - Segment operating income for Allegion Americas was $211.4 million in Q1 2025, compared to $187.0 million in Q1 2024, while Allegion International's operating income decreased to $11.7 million from $13.0 million[66] - Allegion Americas segment net revenues increased by 6.8%, or $48.5 million, to $757.8 million, driven by higher volumes and acquisitions[90] - Allegion International segment net revenues decreased by 0.3%, or $0.5 million, to $184.1 million, primarily due to unfavorable foreign currency exchange rates[97] Debt and Interest - The interest rate on outstanding borrowings under the Credit Facilities was 5.550% as of March 31, 2025, based on SOFR plus a margin of 1.225%[30] - Interest expense for Q1 2025 increased by $1.8 million to $24.7 million due to higher interest rates on outstanding debt[82] - The company had $400.0 million of 3.550% Senior Notes due 2027 and $600.0 million of 5.411% Senior Notes due 2032 outstanding as of March 31, 2025[31] Shareholder Activities - The company repurchased $40.0 million of ordinary shares during the three months ended March 31, 2025, with approximately $200.0 million remaining under the share repurchase authorization[47] - The company has authorized the repurchase of up to $500.0 million of its ordinary shares under the existing share repurchase program[133] - A total of 312,000 shares were purchased during the first quarter of 2025 at an average price of $128.29 per share[133] Tax and Compliance - The effective income tax rate decreased to 15.4% in Q1 2025 from 19.0% in Q1 2024, primarily due to favorable changes in uncertain tax positions and income tax credits[54] - The company remains in compliance with all applicable covenants under the credit agreement as of March 31, 2025[107] Acquisitions and Investments - The company completed acquisitions of Next Door and Lemaar for a total consideration of approximately $11.1 million in Q1 2025[19][20] - Allegion completed the acquisition of Trimco Hardware on April 2, 2025, which will be integrated into the Allegion Americas segment[67] - The company had investments in debt and equity securities without readily determinable fair values of $64.9 million as of March 31, 2025[46] Risk Management - The company continues to face risks related to increased competition and technological developments[127] - The company has not identified any new risk factors beyond those disclosed in its Annual Report for the year ended December 31, 2024[132] - The company is committed to managing its global supply chain effectively to mitigate disruptions[127] Operational Efficiency - The company experienced mid-single digit revenue growth in Q1 2025, driven by strong demand in the Americas non-residential business[71] - The company estimates that approximately 20-25% of its cost of goods sold (COGS) is sourced from Mexico, with less than 5% from China[72] Internal Controls and Reporting - There have been no changes in the company's internal control over financial reporting that materially affected its effectiveness during the first quarter of 2025[129] - The management has concluded that the disclosure controls and procedures are effective as of March 31, 2025[126]

Allegion (NYSE: ALLE) Reports Q1-2025 Financial Results Solid execution drives strong margin expansion and operating leverage Quarterly Financial Highlights (All comparisons against the first quarter of 2024, unless otherwise noted) DUBLIN (April 24, 2025) – Allegion plc (NYSE: ALLE), a leading global security products and solutions provider, today reported financial results for its first quarter (ended March 31, 2025). First-quarter 2025 operating income was $196.4 million, an increase of $24.3 million or ...

Core Viewpoint - Allegion plc (ALLE) is expected to report first-quarter 2025 results on April 24, with revenue estimates of $931.6 million, reflecting a 4.2% year-over-year growth, and earnings per share (EPS) estimated at $1.68, indicating an 8.4% increase from the previous year [1]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for ALLE's first-quarter revenues is $931.6 million, indicating a growth of 4.2% from the prior-year quarter [1]. - The consensus mark for earnings is pinned at $1.68 per share, which has remained steady in the past 30 days, reflecting an 8.4% growth from the year-ago quarter [1]. - Allegion has delivered better-than-expected results in each of the trailing four quarters, with an average earnings surprise of 9.9% [2]. Group 2: Segment Performance Insights - The Allegion Americas segment is expected to see a revenue increase of 5.5% year-over-year to $748.5 million, driven by stable demand across various end markets including education, healthcare, government, hospitality, and retail [3]. - The Allegion International segment's performance is anticipated to benefit from the increased adoption of advanced technologies in the electronics security products market, such as wireless locks and mobile-enabled smart locks [4]. Group 3: Strategic Acquisitions - Allegion has focused on expanding its product offerings through acquisitions, including Krieger Specialty Products and Unicel Architectural Corp. in June 2024, which enhanced its door and frame portfolio and expanded its non-residential product offerings [5]. - The acquisition of Dorcas in March 2024 strengthened Allegion's security products portfolio and enhanced its presence in the healthcare and education sectors [6]. Group 4: Cost and Margin Considerations - Rising operating costs due to increased material costs and investments in new products and growth initiatives are expected to impact the company's bottom line, with a projected 4.4% increase in the cost of sales year-over-year [7]. - The adjusted operating margin is anticipated to decline by 10 basis points to 21.1% in the first quarter [7]. Group 5: Foreign Exchange Impact - Allegion's extensive geographic presence subjects it to foreign exchange headwinds, with a stronger U.S. dollar likely to negatively affect its overseas business [8]. Group 6: Earnings Prediction Model - The current model does not predict an earnings beat for ALLE, as the Earnings ESP is 0.00% with both the Most Accurate Estimate and the Zacks Consensus Estimate at $1.68 per share [9][10].

Allegion plc (ALLE) is poised to benefit from strength across its businesses, focus on operational excellence, accretive acquisitions and shareholder-friendly policies. The company remains focused on investing in growth opportunities and strengthening its long-term market position.ALLE, which has a market capitalization of $10.7 billion, currently carries a Zacks Rank #2 (Buy). Let’s delve into the factors that have been aiding the firm for a while now.Business Strength: Allegion is benefiting from strong m ...

Allegion plc (ALLE) has recently acquired Trimco Hardware (Trimco), along with its brands and various assets, through one of its subsidiaries. The financial terms of the transaction have been kept under wraps.Based in Los Angeles, CA, Trimco is engaged in manufacturing high-performance and custom-designed door hardware. The company’s products are sold in commercial and institutional markets.ALLE’s Acquisition RationaleThe latest buyout is in sync with Allegion’s policy of acquiring businesses to expand its ...