Allegion's Q1 Earnings & Revenues Surpass Estimates, Increase Y/Y

Allegion plc’s ALLE first-quarter 2025 adjusted earnings of $1.86 per share beat the Zacks Consensus Estimate of $1.68. The bottom line increased 20% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

ALLE’s Revenue Details

Allegion’s revenues were $941.9 million, which increased 5.4% year over year. Organic revenues increased 4%, driven by solid momentum in the non-residential business in the Americas region. Revenues beat the Zacks Consensus Estimate of $932 million.

Acquired assets boosted revenues by 1.8%. Forex woes left an adverse impact of 3%.

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

Revenues from Allegion Americas increased 6.8% year over year to $757.8 million. The figure accounted for 80.5% of the quarter’s revenues. Our estimate for segmental revenues was $748.5 million. Organic revenues increased 4.9%, driven by non-residential businesses, which grew in high-single digits.

Operating income for the segment was $211.4 million, up 13.1% year over year. Our estimate was $179.7 million.

Revenues from Allegion International were $184.1 million, down 0.3% year over year. The metric accounted for 19.5% of the quarter’s revenues. Our estimate for segmental revenues was $180.4 million. However, organic revenues grew 0.9%, driven by price.

Segmental operating income was $11.7 million, down 10% year over year. Our estimate was $11.1 million.

Allegion’s Margin Profile

In the quarter, Allegion’s cost of revenues increased 3.4% year over year to $519.4 million. Gross profit was $422.5 million, up 8% year over year, while the gross margin jumped 110 basis points (bps) to 44.9%.

Selling and administrative expenses increased 3.1% year over year to $226.1 million. Adjusted EBITDA was $228.0 million, reflecting a year-over-year increase of 12.2%. The margin grew 140 bps year over year to 24.2%.

Adjusted operating income increased 14.1% year over year to $196.4 million. The adjusted margin was 22.7%, up 150 bps. Interest expenses were $24.7 million, up 7.9% year over year. The effective tax rate was 15.4%, down from 19% in the year-ago quarter.

ALLE’s Balance Sheet and Cash Flow

While exiting first-quarter 2025, Allegion had cash and cash equivalents of $494.5 million compared with $503.8 million at the end of 2024. Long-term debt was $1.97 billion compared with $1.98 billion at the end of 2024.

In the first three months of 2025, ALLE generated net cash of $104.5 million from operating activities, reflecting an increase of more than 100% year over year. Capital expenditure was $21.1 million, down 22.4% year over year. For the first three months, the available cash flow was $83.4 million.

Allegion repurchased shares for $40.0 million. Dividends paid out totaled $43.6 million, reflecting an increase of 3.6% year over year.

Allegion’s 2025 Outlook

The company has affirmed the 2025 guidance. Allegion expects revenues to increase in the range of 1-3% from the year-ago level. The company anticipates organic revenues to grow in the range of 1.5-3.5%.

Adjusted earnings are projected to be in the range of $7.65-$7.85 per share.

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

AZZ Inc. AZZ came out with quarterly earnings of $0.98 per share, beating the Zacks Consensus Estimate of $0.95. This compares with earnings of $0.93 per share a year ago.

AZZ reported revenues of $351.88 million, missing the consensus estimate by 3.77%. This compares with year-ago revenues of $366.5 million. 

Valmont Industries VMI reported revenues of $969.31 million in the first quarter of 2025, declining 0.9% on a year-over-year basis. EPS of $4.32 for the same period compares with $4.32 a year ago.

The reported revenues compare with the Zacks Consensus Estimate of $975.6 million. The company delivered an EPS surprise of 1.89%, with the consensus estimate being $4.24.

Pentair plc PNR came out with quarterly earnings of $1.11 per share in the first quarter of 2025, beating the Zacks Consensus Estimate of $1.01. This compares with earnings of $0.94 per share a year ago.

Pentair posted revenues of $1.01 billion for the quarter, surpassing the consensus estimate by 2.68%. This compares with year-ago revenues of $1.02 billion.

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

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