Allegion Cuts FY21 Outlook Citing Supply Chain Constraints

• Allegion PLC (NYSE: ALLE) lowered its FY21 outlook, citing supply chain constraints, electronic shortages, and rising freight and material costs.

• Allegion expects revenue growth of 4% - 4.5% on a reported basis (prior 7% - 7.5%) and 3% - 3.5% organically, versus prior outlook of 5.5% - 6%.

• The company expects the widespread supply chain, electronic component, and labor shortages to delay $80 million - $100 million in 2021 revenue and create inefficiencies that impact margin performance.

• Allegion International organic revenue growth remains consistent with prior guidance, with primary delay related to the Allegion Americas reporting segment.

• Allegion expects EPS of $4.95 - $5.05 (prior view $5.15 -$5.30). It sees an adjusted EPS of $5.00 - $5.10 (previous $5.25 - $5.40) versus the consensus of $5.40.

• Full-year available cash flow is now estimated to be $460 million - $480 million ($490 million - $510 million).

• The company says demand continued to accelerate in Q3. However, noted that supply chain constraints and electronics shortages slowed the revenue realization pace, causing backlogs to increase.

• Allegion expects growth, profitability, and earnings to improve during 2022 with normalizing macroeconomic conditions.

• Price Action: ALLE shares are trading higher by 0.54% at $132.9 on the last check Friday.

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