Allegion Gears Up to Post Q2 Earnings: Here's What to Expect

Allegion plc ALLE is scheduled to release second-quarter 2025 results on July 24, before market open.

The Zacks Consensus Estimate for ALLE’s second-quarter revenues is pegged at $1 billion, indicating growth of 3.7% from the prior-year quarter’s figure. The consensus mark for earnings is pinned at $2 per share, which has increased a penny in the past 30 days. The figure indicates growth of 2% from the year-ago quarter's figure.

The company delivered better-than-expected results in each of the trailing four quarters, the earnings surprise being 10.1% on average. In the last reported quarter, its bottom line beat the consensus estimate by 10.7%.

Let us see how things have shaped up for Allegion this earnings season.

Factors Likely to Have Shaped ALLE’s Quarterly Performance

ALLE’s Allegion Americas segment’s second-quarter performance is expected to have benefited from stable demand across end markets like education, healthcare, government, hospitality and retail. The increase in demand for non-residential products is also anticipated to have augmented its top-line performance in the quarter. We expect revenues from the segment to increase 4.1% year over year to $801.9 million.

An increase in demand for electronic security products, driven by growing awareness about the security and safety of people and infrastructure, is expected to have boosted the Allegion International segment’s performance in the second quarter. Despite this, challenges in some European regions are likely to have hurt the segment’s performance. We expect the segment’s revenues to decrease 4.5% from the year-ago quarter to $186.2 million.

Allegion has always been focused on expanding its product offerings and market presence through buyouts. The company acquired Lemaar Pty Ltd (Lemaar) in March 2025, enhancing its security and accessibility portfolio in Australia. In February 2025, ALLE acquired Next Door Company, which expanded its doors and frames portfolio. In June 2024, the company acquired Krieger Specialty Products. The addition of Krieger’s expertise in specialty solutions enabled ALLE to strengthen its door and frame portfolio. Also, in the same month, it purchased Unicel Architectural Corp. The inclusion of Unicel’s proficiency in glass and building envelope solutions expanded its product portfolio within the non-residential business. The buyouts are expected to have boosted Allegion’s top line in the quarter.

However, rising operating costs, owing to increased material costs and investments in new products, channel development and growth initiatives, are likely to have impacted the company’s bottom line. We expect ALLE’s cost of sales to increase 2.4% year over year to $550.2 million and the adjusted operating margin to decline 50 basis points to 23.2% in the second quarter.

Also, given the company’s extensive geographic presence, its operations are subject to foreign exchange headwinds. A stronger U.S. dollar is likely to have hurt Allegion's overseas business.

Earnings Whispers

Our proven model does not conclusively predict 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 not the case here, as elaborated below.

Earnings ESP: ALLE has an Earnings ESP of -0.63% as the Most Accurate Estimate is pegged at $1.99 per share, which is lower than the Zacks Consensus Estimate of $2. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: ALLE currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.

Illinois Tool Works Inc. ITW has an Earnings ESP of +1.44% and a Zacks Rank of 3 at present. The company is slated to release second-quarter 2025 results on July 30.

Illinois Tool’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3%.

Eaton Corporation plc ETN has an Earnings ESP of +0.39% and a Zacks Rank of 3 at present. The company is scheduled to release second-quarter 2025 results on Aug. 5.

Eaton’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 1.9%.

Emerson Electric Co. EMR has an Earnings ESP of +0.46% and a Zacks Rank of 3 at present. The company is slated to release third-quarter fiscal 2025 (ended June 2025) results on Aug. 6.

Emerson’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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