Allegion's Q4 Earnings Miss Estimates, Revenues Increase Y/Y

Allegion plc’s ALLE fourth-quarter 2025 adjusted earnings of $1.94 per share miss the Zacks Consensus Estimate of $2.01. However, the bottom line increased 4.3% year over year.

In 2025, the company’s adjusted earnings were $8.14 per share, up 8.1% year over year.

ALLE’s Revenue Details

Allegion’s revenues were $1.03 billion, which increased 9.3% year over year. Organic revenues increased 3.3%, driven by price realization. Revenues were in line with the Zacks Consensus Estimate.

Acquired assets boosted revenues by 4.4%. Foreign currency had a positive impact of 1.6%.

In 2025, ALLE reported net revenues of $4.07 billion, which increased 7.8% year over year.

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

Revenues from Allegion Americas increased 6.1% year over year to $795.5 million. The figure accounted for 77% of the quarter’s revenues. Our estimate for segmental revenues was $798.6 million. Organic revenues increased 4.8%, driven by solid momentum in the non-residential business.

Operating income for the segment was $206.1 million, up 6.3% year over year. Our estimate was $224.1 million.

Revenues from Allegion International were $237.7 million, up 21.5% year over year. The metric accounted for 23% of the quarter’s revenues. Our estimate for segmental revenues was $230.8 million. Organic revenues decreased 2.3%.

Segmental operating income was $29.4 million, up 66.1% year over year. Our estimate was $33.0 million.

Allegion’s Margin Profile

In the quarter, Allegion’s cost of revenues increased 8.5% year over year to $573.7 million. Gross profit was $459.5 million, up 10.3% year over year, while the gross margin jumped 40 basis points (bps) to 44.5%.

Selling and administrative expenses increased 7.7% year over year to $249.9 million. Adjusted EBITDA was $248.2 million, reflecting a year-over-year increase of 11%. The margin was 24%, up 40 basis points on a year-over-year basis.

Adjusted operating income increased 10.6% year over year to $231.3 million. The adjusted margin was 22.4%, up 30 basis points year over year. Interest expenses were $25.1 million, down 0.4% year over year. The effective tax rate was 19.8%, up from 11.2% in the year-ago quarter.

ALLE’s Balance Sheet and Cash Flow

While exiting fourth-quarter 2025, Allegion had cash and cash equivalents of $356.2 million compared with $503.8 million at the end of 2024. Long-term debt was $1.98 billion, in line with the year-ago quarter.

In 2025, ALLE generated net cash of $783.8 million from operating activities, reflecting an increase of 16.1% year over year. Capital expenditure was $98.1 million, up 6.5% year over year. For the full year, the available cash flow was $685.7 million.

Allegion repurchased shares for $80.0 million. Dividends paid out totaled $175.3 million, reflecting an increase of 5% year over year.

Allegion’s 2026 Outlook

The company has issued 2026 guidance. Allegion expects revenues to increase in the range of 5-7% from the year-ago level.  ALLE anticipates organic revenues to grow in the range of 2-4%.

Adjusted earnings are projected to be in the range of $8.70-$8.90 per share. The company estimates available cash flow to be 85-95% of adjusted net income. Adjusted effective tax rate is projected to be approximately 18-19%.

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

Graco Inc. GGG posted quarterly earnings of 77 cents per share in the fourth quarter of 2025, in line with the Zacks Consensus Estimate. This compares with earnings of $0.64 per share a year ago.

Graco posted revenues of $593.2 million for the quarter, surpassing the Zacks Consensus Estimate by 1.39%. This compares with year-ago revenues of $548.67 million.

Baker Hughes Company BKR reported fourth-quarter 2025 adjusted earnings of 78 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also increased from the year-ago level of 70 cents.

Total quarterly revenues of $7,386 million beat the Zacks Consensus Estimate of $7,056 million. The top line also increased from the year-ago quarter’s $7,364 million.

3M Company MMM delivered adjusted earnings of $1.83 per share in the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.82. The company reported earnings of $1.68 per share in the year-ago quarter.

MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.08 billion. On an adjusted basis, organic revenues increased 2.2% year over year.

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

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