DUBLIN - Allegion plc (NYSE: NYSE:ALLE), a leading global security products and solutions provider, today announced a strong performance for the second quarter, which ended June 30, 2024.
The company reported an adjusted EPS of $1.96, reflecting an 11.4% increase from the $1.76 reported in the second quarter of 2023. This figure surpassed analyst expectations by $0.12, with estimates at $1.84. Revenue also saw a rise, reaching $965.6 million, a 5.8% increase from the previous year and exceeding the consensus estimate of $953.63 million.
The company's robust performance is attributed to solid execution across the board, leading to record Q2 revenue and adjusted EPS. "Strong execution by the entire Allegion team drove record Q2 revenue and adjusted EPS," said Allegion President and CEO John H. Stone.
He further commented on the company's resilience and strategic investments, "Q2 revenue growth and margin expansion demonstrate the resilience of Allegion’s business model. We are accelerating capital deployment, consistently returning cash to shareholders and investing in accretive acquisitions like Krieger Specialty Products and Unicel Architectural."
In light of these results, Allegion has raised its full-year outlook. The company now projects reported revenue growth to be in the range of 2.5% to 3.5% and has increased its full-year adjusted EPS outlook to a range of $7.15 to $7.30. This adjustment reflects confidence in the company's performance and strategic direction.
The second-quarter revenue increase was primarily driven by price realization and volume growth, with a 0.9% positive impact from acquisitions and a modest headwind from foreign currency. Operating margin for the quarter stood at 21.6%, up from 20.2% in the previous year, while the adjusted operating margin increased by 150 basis points to 23.7%, thanks to favorable volume leverage and net positive price and productivity against inflation and investments.
Allegion's Americas segment saw a 6.0% revenue increase, with organic growth at 5.7%. The International segment's revenues also rose by 5.2%, with organic growth at 3.1%. These figures reflect the company's successful price realization and volume growth across different markets.
The company's effective tax rate for the second quarter was 17.8%, compared to 12.6% last year, with the adjusted effective tax rate at 18.2%, up from 13.9%. Year-to-date available cash flow for 2024 was reported at $176.0 million, a slight decrease from the prior year's $190.1 million.
Allegion's financial strength is further underscored by its cash and cash equivalents, which stood at $747.5 million at the end of the second quarter, and its proactive capital management, as evidenced by the repurchase of approximately 0.3 million shares for approximately $40 million and the payment of quarterly dividends of $0.48 per ordinary share or $41.8 million.
The company's outlook remains positive, with CEO John H. Stone affirming the available cash flow outlook and expressing pride in the team's performance, "We’re raising our full-year guidance for reported revenue and adjusted EPS, and we’re affirming our available cash flow outlook. I’m proud of how the Allegion team lives our values while driving results for our customers and shareholders."
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