Allegion (ALLE) Set to Report Q2 Earnings: What's in Store?
Allegion plc ALLE is scheduled to release second-quarter 2023 results on Jul 26, before the market open.
The Zacks Consensus Estimate for the company’s second-quarter 2023 earnings has increased by a penny in the past 60 days. The company has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average beat being 12.5%.
Let’s see how things are shaping up for Allegion this earnings season.
Factors to Note
Strengthening demand in end markets and effective pricing are likely to have driven Allegion’s second-quarter performance.
Strength in non-residential, residential and electronics end markets are expected to have boosted the performance of the Allegion Americas segment. We expect the segment’s revenues to increase 23.7% from the second-quarter 2022 reported number.
The company’s Plano Group acquisition, which expanded ALLE’s Interflex portfolio and AWFM business with new capabilities in SaaS models and recurring revenue solutions, is likely to have augmented its revenues in the to-be-reported quarter. We expect Allegion’s second-quarter revenues to climb 18.8% from the year-ago period. For the to-be-reported quarter, we expect the adjusted earnings to increase 1.3% year over year.
However, escalating cost of sales and selling, general and administrative expenses are likely to have dented the company’s margins in the to-be-reported quarter. For the second quarter, we expect Allegion’s gross margin to decrease by 220 basis points from the year-ago reported figure.
Allegion PLC Price and EPS Surprise
Allegion PLC price-eps-surprise | Allegion PLC Quote
Also, the softness in portable Securities business is likely to have affected the company’s Allegion International segment’s growth. Given ALLE’s substantial international presence, foreign-currency headwinds are likely to have hurt the top line in the second quarter.
Earnings Whispers
Our proven model suggests an earnings beat for ALLE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: Allegion has an Earnings ESP of +3.94% as the Most Accurate Estimate is pegged at $1.76, higher than the Zacks Consensus Estimate of $1.69. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Allegion carries a Zacks Rank of 3.
Highlights of Q1 Earnings
Allegion reported first-quarter 2023 adjusted earnings of $1.58 per share, surpassing the Zacks Consensus Estimate of adjusted earnings of $1.35 per share. The bottom line increased 39.8% from the year-ago period’s figure of $1.13 per share. In the quarter under review, Allegion’s revenues were $923 million, reflecting growth of 27.6% from the year-ago quarter.
Other Stocks to Consider
Here are some other companies within the broader Industrial Products sector, which according to our model, also have the right combination of elements to beat on earnings this reporting cycle.
Emerson Electric Co. EMR has an Earnings ESP of +2.35% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to release third-quarter fiscal 2023 (ended Jun 30, 2023) results on Aug 2. Emerson’s earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters while missing in one, the average beat being 4.5%.
Ingersoll Rand Inc. IR has an Earnings ESP of +0.85% and a Zacks Rank of 3. The company is slated to release second-quarter 2023 results on Aug 2.
Ingersoll Rand’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 12.6%.
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Emerson Electric Co. (EMR) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
Allegion PLC (ALLE) : Free Stock Analysis Report
