Allegion plc ALLE reported impressive results for first-quarter 2019, wherein adjusted earnings and revenues beat the Zacks Consensus Estimate.
Quarterly adjusted earnings came in at 88 cents per share, outpacing the Zacks Consensus Estimate of 87 cents. The bottom line was also 10% higher than the year-ago figure. The upside can be primarily attributed to impressive sales growth and improved operating income.
Revenues for the reported quarter came in at $655 million, up 6.8% year over year. The top line also surpassed the consensus estimate of $651.6 million. Revenues improved 5.8% on an organic basis. The stellar performance was backed by strength in Americas non-residential business, and acquisition benefits, partially offset by adverse impacts of unfavorable foreign exchange movements.
Revenues in the Americas rose 8.2% year over year to $475.3 million. EMEIA (Europe, Middle East, India and Africa) revenues declined 4.9% to $142.9 million. Revenues in the Asia-Pacific surged 55.3% to $36.8 million in the reported quarter.
Allegion PLC Price, Consensus and EPS Surprise
Allegion PLC Price, Consensus and EPS Surprise | Allegion PLC Quote
In the first quarter, Allegion’s cost of sales escalated 6.4% year over year to $378.1 million. Gross profit grew 7.4% while gross margin improved 30 basis points (bps) to 42.3%.
Selling and administrative expenses jumped 6.2% year over year to $168.9 million.
Adjusted operating margin expanded 10 bps to 17.1%.
Balance Sheet/Cash Flow
As of Mar 31, 2019, Allegion had cash and cash equivalents of $153.8 million, down from $283.8 recorded as of Dec 31 2018. Long-term debt was $1,401.3 million, down from $1,409.5 million recorded at the end of 2018.
In first-quarter 2019, the company used net cash of $12.6 million from its operating activities, compared with $10.1 million used in the year-ago quarter. Capital expenditures totaled $12.3 million compared with $8.7 million a year ago.
Adjusted earnings per share are now expected in the range of $4.75 to $4.90, reflecting an increase of 6% to 9% year over year.
The company expects full-year 2019 revenue growth on both reported and organic basis in the band of 5-6%.
Full-year adjusted effective tax rate is anticipated to be 16%.
Available cash flow is targeted to be approximately $430-$450 million.
Zacks Rank & Key Picks
Allegion currently carries a Zacks Rank #3(Hold).
Some better-ranked stocks in the space are DXP Enterprises, Inc. DXPE, Cintas Corporation CTAS and Actuant Corporation ATU. While DXP Enterprises sports a Zacks Rank #1 (Strong Buy), Cintas and Actuant carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DXP Enterprises delivered average earnings surprise of 46.55% in the trailing four quarters.
Cintas pulled off average positive earnings surprise of 6.09% in the trailing four quarters.
Actuant delivered average earnings surprise of 11.01% in the trailing four quarters.
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