Allegion (NYSE:ALLE) shares surged more than 8% in premarket trading on Thursday after the security products manufacturer reported second-quarter earnings and revenue ahead of Wall Street expectations while increasing its full-year adjusted earnings outlook.
The stronger results were driven by solid organic growth and expanding margins, particularly across the company’s Americas business.
Earnings and revenue beat expectations
Allegion reported adjusted earnings of $2.40 per share for the second quarter, comfortably exceeding analysts’ consensus estimate of $2.21.
Revenue increased 12.7% year over year to $1.15 billion, surpassing market expectations of $1.12 billion and improving from $1.02 billion in the same period last year.
Following the results, the company’s shares climbed around 8% in premarket trading.
Company lifts adjusted earnings guidance
Allegion raised its full-year 2026 adjusted earnings forecast to a range of $8.85 to $9.00 per share, reflecting confidence in continued operating momentum.
However, its reported earnings guidance of between $7.95 and $8.10 per share remained below the analyst consensus estimate of $8.79.
President and Chief Executive Officer John H. Stone said, “Allegion delivered a strong quarter driven by organic growth and margin expansion in the Americas.”
He added, “As a result, we are raising our company’s full-year outlook for revenue and adjusted EPS.”
Americas business leads growth
Organic revenue increased 6.9% during the quarter, supported by higher sales volumes and favourable pricing.
The Americas segment delivered revenue growth of 11.8%, including organic growth of 8.9%, with both residential and non-residential businesses posting high-single-digit gains.
International revenue increased 16.2%, although organic revenue declined 1.2% as demand weakened across key European markets.
Margins improve despite cash flow pressure
Adjusted operating margin expanded to 24.2% from 23.7% a year earlier, benefiting from improved operating leverage, pricing and productivity initiatives.
The company also increased its full-year revenue growth forecast to between 7.5% and 8.5%, while maintaining expectations for organic revenue growth of 3.5% to 4.5%.
Available cash flow for the year to date totalled $260.8 million, down $14.6 million from the prior-year period, primarily because stronger late-quarter sales resulted in higher accounts receivable.
During the quarter, Allegion repurchased approximately 0.9 million shares for $120 million as part of its capital return programme.
Allegion stock price
