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Jun 30, 2023
Allegion Q2 2023 Earnings Report
Allegion reported a strong second-quarter performance driven by electronics growth, margin expansion, and increased cash flow, leading to an increase in the full-year EPS outlook.
Key Takeaways
Allegion's Q2 2023 results showed strong revenue growth, driven by electronics, and margin expansion. The company raised its full-year EPS outlook and available cash flow expectations.
Net earnings per share (EPS) of $1.61, compared with $1.30; Adjusted EPS of $1.76, up 23.1% compared with $1.43.
Revenues of $912.5 million, up 18.0% on a reported basis and up 5.6% on an organic basis.
Operating margin of 20.2%, compared with 19.0%; Adjusted operating margin of 22.2%, up 130 basis points compared with 20.9%.
Americas electronics growth of approximately 40%
Allegion
Allegion
Allegion Revenue by Segment
Revenue by Segment
Allegion Americas Revenue
CapyFin.comAllegion International Revenue
CapyFin.com Forward Guidance
The company is tightening its full-year 2023 revenue growth outlook and expects it to be 11.5% to 12.5%, while also updating its organic revenue growth outlook and expects it to be 5.5% to 6.5%. The company is increasing its full-year 2023 reported EPS outlook and expects it to be in the $6.10 to $6.20 range, with adjusted EPS expected to be between $6.70 to $6.80. The company increases expectations for full-year 2023 available cash flow to approximately $500 to $520 million.
Positive Outlook
- Full-year 2023 revenue growth outlook 11.5% to 12.5%
- Full-year 2023 organic revenue growth outlook 5.5% to 6.5%
- Full-year 2023 reported EPS outlook $6.10 to $6.20 range
- Adjusted EPS expected to be between $6.70 to $6.80
- Full-year 2023 available cash flow to approximately $500 to $520 million
Challenges Ahead
- Headwind of approximately $0.29 for interest and other income
- Full-year adjusted effective tax rate of approximately 15% to 15.5%
- Average diluted share count for the full year of approximately 88.3 million shares.
- Adjustments to 2023 EPS include estimated impacts of approximately $0.40 per share for acquisition-related amortization
- $0.20 per share for restructuring, M&A and amortization expense related to acquired backlog (approximately $9 million pre-tax).
Revenue & Expenses
Visualization of income flow from segment revenue to net income