Trane Technologies plc (NYSE:TT) reported better-than-expected second-quarter earnings on Thursday and lifted its full-year guidance after continued demand for its energy-efficient climate solutions drove double-digit revenue growth.
The stronger outlook was welcomed by investors, sending the company’s shares up 6.98% in premarket trading.
Earnings and Revenue Surpass Expectations
The company generated adjusted earnings of $4.31 per share during the second quarter, exceeding analysts’ consensus estimate of $4.26.
Quarterly revenue rose 11% year over year to $6.4 billion, topping market expectations of $6.19 billion. Organic revenue increased 9% from the same period last year.
Growth was supported by robust demand for sustainable heating, ventilation and air conditioning (HVAC) solutions. Bookings in the Americas Commercial HVAC business climbed 50%, while organic revenue for the segment increased by a low double-digit percentage.
Company Lifts 2026 Outlook
Trane Technologies raised its full-year 2026 adjusted earnings guidance to a range of $15.20 to $15.30 per share. The midpoint of $15.25 is above the analyst consensus forecast of $14.91.
The company also increased its revenue outlook, now expecting reported revenue growth of approximately 11.5% for the year and organic revenue growth of around 9%.
“We delivered another outstanding quarter, driven by strong execution of our strategy and the dedication of our global team,” said Dave Regnery, Chair and CEO. “We continue to see heightened demand for our sustainable, energy-efficient solutions, resulting in strong organic revenue growth, exceptional bookings strength, and a record backlog of $12.1 billion.”
Record Backlog Reflects Strong Demand
Trane Technologies reported record bookings of $7.8 billion during the quarter, an increase of 39% from a year earlier, while organic bookings advanced 37%.
The company’s book-to-bill ratio reached 123%, with every operating segment recording a ratio above 100%.
Order backlog climbed to a record $12.1 billion, representing a 70% increase year over year. The Americas Commercial HVAC business posted an even stronger performance, with backlog rising 90%.
Cash Flow Strength Offsets Margin Pressure
Adjusted operating margin was 19.7%, down 60 basis points from the prior-year quarter.
Despite the modest decline in margins, Trane Technologies generated first-half free cash flow of $1.6 billion, almost doubling the $841 million reported during the same period a year earlier.
Trane Technologies stock price
