Key Points
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Allegion beat on both the top and bottom lines for the period.
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Its also raised its full-year guidance for 2025.
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Security products specialist Allegion (NYSE: ALLE) was popular with investors on Thursday, following its release of an encouraging quarterly earnings report. The document pleased investors, as they bid the company’s stock up by more than 6% on the day. This compared rather favorably to the benchmark S&P 500 (SNPINDEX: ^GSPC), which essentially flatlined across the trading session.
Encouraging growth in key fundamentals
Well before Thursday’s market open, Ireland-based Allegion unveiled its second-quarter results. These showed that the company managed to boost revenue by nearly 6% year over year to slightly over $1.02 billion. On an organic basis — i.e., excluding the impact of divestitures and acquisitions, plus foreign currency movements — the top line also increased, by a little over 3%.
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Meanwhile, non-GAAP (generally accepted accounting principles) adjusted net income also saw improvement, rising by 4% to nearly $177 million, or $2.04 per share.
That meant a double beat for Allegion, as analysts tracking the company were collectively estimating it would post $1 billion in revenue, and a per-share adjusted net earnings figure of $1.99.
In its earnings release, Allegion flagged the North American nonresidential market as a particular growth driver. It said this business rose at a high-single-digit percentage rate, while price adjustments were a crucial factor in a 50-basis-point improvement in adjusted operating margin (to a shade under 30%).
Guidance gets a boost
Compounding the good news about the rising fundamentals, Allegion raised its guidance for both revenue and profitability for full-year 2025. It now believes its top line will increase by 6.5% to 7.5% compared to 2024, while adjusted earnings per share should land at $8.00 to $8.15. The average analyst projection for the latter number is only $7.85.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
