CARMEL, Ind. – Allegion posted its second quarter earnings results, reporting 61 cents earnings per share for the quarter, missing the Thomson Reuters consensus estimate of 64 cents. The company had net revenues of $531.5 million for the quarter, up .5% compared to the prior year, and net earnings of $51.6 million or 53 cents earnings per share from continuing operations.

This compares with net earnings of $61.1 million or 64 cents per share from continuing operations for the 2013 second quarter.

During an earnings call on July 30, Allegion CFO Patrick Shannon said the company’s North America residential revenue growth reflected strength in the builder and e-commerce channels. He added the company continues to see strong growth in residential electronic locks with the category increasing more than 20% compared to the prior period.

“Commercial organic revenues were up slightly in the quarter as commercial verticals compensated for weak institutional markets,” he said.

Adjusted operating margins for the quarter were down 140 basis points, a decrease Shannon attributed primarily to “incremental investments and unfavorable business mix related to the higher growth of residential revenue compared to commercial revenue.”

“We continue to see improved year-over-year residential margins, which partially offset the unfavorable business mix,” he said. “Although operating margins declined in the quarter, we are still projecting margin improvement for the full-year as a result of higher volumes, improved pricing and to some extent an easier comparison in the fourth quarter.”

Dave Petratis, Allegion’s president and CEO, said in the Americas the company is seeing a shift in growth between residential and non-residential markets as compared to its prior guidance.

“The non-residential markets will continue to recover at a slower pace. Availability and cost of labor continues to be a challenge and any weather-related carryover from the prior quarter appears to have been modest,” Petratis said during the earning call.

The company is now forecasting non-residential 2014 growth in the low-single digits, mostly driven by the commercial segments of the market. It projects the institutional market to be flat to negative low-single digits for the year.

“We see the growth in traditional commercial segments such as retail, office and hospitality as opportunities to redirect efforts to drive more share of discretionary business coming through those channels,” Petratis said. “This remains a critical component in our ability to expand in our core markets.”

Allegion traded up 2.31% on July 30, hitting $53.66 with 799,286 shares of the company’s stock trading hands. Allegion has a 52-week low of $40.24 and a 52-week high of $58.29. The stock has a 50-day moving average of $55.85 and a 200-day moving average of $52.38. Analysts at Imperial Capital raised their price target on shares of Allegion from $57 to $60 in a research note released June 18.

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