Allegion's Q2 Earnings & Revenues Surpass Estimates, Increase Y/Y

Allegion plc’s ALLE second-quarter 2025 adjusted earnings of $2.04 per share beat the Zacks Consensus Estimate of $2. The bottom line increased 4.1% year over year.

ALLE’s Revenue Details

Allegion’s revenues were $1.02 billion, which increased 5.8% year over year. Organic revenues increased 3.2%, driven by solid momentum in the non-residential business in the Americas region. Revenues beat the Zacks Consensus Estimate of $1 billion.

Acquired assets boosted revenues by 1.9%. Foreign currency had a positive impact of 0.7%.

ALLE reports revenues under two segments. A brief discussion of quarterly results is provided below:

Revenues from Allegion Americas increased 6.6% year over year to $821.5 million. The figure accounted for 80.4% of the quarter’s revenues. Our estimate for segmental revenues was $801.9 million. Organic revenues increased 4.5%, driven by solid momentum in the non-residential businesses, which grew in high-single digits.

Operating income for the segment was $236.6 million, up 10.4% year over year. Our estimate was $230.9 million.

Revenues from Allegion International were $200.5 million, up 2.9% year over year. The metric accounted for 19.6% of the quarter’s revenues. Our estimate for segmental revenues was $186.2 million. However, organic revenues declined 2.2%.

Segmental operating income was $15.7 million, down 11.3% year over year. Our estimate was $22.1 million.

Allegion’s Margin Profile

In the quarter, Allegion’s cost of revenues increased 3.4% year over year to $555.5 million. Gross profit was $466.5 million, up 8.9% year over year, while the gross margin jumped 120 basis points (bps) to 45.6%.

Selling and administrative expenses increased 12.5% year over year to $246.8 million. Adjusted EBITDA was $258.1 million, reflecting a year-over-year increase of 5.9%. The margin was 25.3%, flat on a year-over-year basis.

Adjusted operating income increased 5.8% year over year to $241.9 million. The adjusted margin was 23.7%, flat year over year. Interest expenses were $24.6 million, down 2% year over year. The effective tax rate was 20.3%, up from 17.8% in the year-ago quarter.

ALLE’s Balance Sheet and Cash Flow

While exiting second-quarter 2025, Allegion had cash and cash equivalents of $656.8 million compared with $503.8 million at the end of 2024. Long-term debt was $2.04 billion compared with $1.98 billion at the end of 2024.

In the first six months of 2025, ALLE generated net cash of $314.2 million from operating activities, reflecting an increase of 40.2% year over year. Capital expenditure was $38.8 million, down 19.3% year over year. For the first six months, the available cash flow was $275.4 million.

Allegion repurchased shares for $80.0 million. Dividends paid out totaled $87.8 million, reflecting an increase of 4.8% year over year.

Allegion’s 2025 Outlook

The company has raised the 2025 guidance. Allegion expects revenues to increase in the range of 6.5-7.5% from the year-ago level compared with 1-3% anticipated earlier.  ALLE anticipates organic revenues to grow in the range of 3.5-4.5% compared with 1.5-3.5% expected earlier.

Adjusted earnings are projected to be in the range of $8.00-$8.15 per share compared with $7.65-$7.85 expected earlier.

The company estimates available cash flow to be 85-90% of adjusted net income. Adjusted effective tax rate is projected to be approximately 17-18%.

ALLE’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Dover Corporation DOV reported earnings of $2.44 per share in econd quarter 2025, beating the Zacks Consensus Estimate of $2.39. This compares with earnings of $2.36 per share a year ago.

Dover posted revenues of $2.05 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $2.18 billion.

Teck Resources Limited TECK came out with earnings of $0.27 per share in the second quarter of 2025, beating the Zacks Consensus Estimate of $0.2. This compares with earnings of $0.58 per share a year ago.

Teck Resources posted revenues of $1.46 billion in the quarter, missing the Zacks Consensus Estimate by 8.7%. This compares with year-ago revenues of $2.83 billion. 

Packaging Corporation of America PKG reported earnings of $2.48 per share, beating the Zacks Consensus Estimate of $2.44. This compares with earnings of $2.2 per share a year ago.

Packaging Corp. posted revenues of $2.17 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.5%. This compares with year-ago revenues of $2.08 billion.

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

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