Allegion Reports Q1 Financial Results; Revenues Surpass Estimates
The Allegion Americas business continues to see strong end-market fundamentals, although labor availability continues to impact timing of the completion of projects.
DUBLIN, Ireland — Allegion (NYSE: ALLE) posted first-quarter net revenues of $613.1 million and net earnings of $72.2 million. The Q1 adjusted earnings came in at 80 cents per share, missing the Zacks Consensus Estimate of 84 cents. Adjusted earnings were up 9.6% compared to the same period in 2017.
Quarterly net revenues of $613.1 million surpassed the consensus mark of $606.9 million. The figure increased 11.7% on a year-over-year basis on the back of modest organic growth, synergies from acquisitions and favorable foreign currency impact, according to Zacks.
A 3.3% uptick in organic revenues contrasted with lower than 6.1% growth registered in the previous reported quarter.
Revenue Growth for Americas Segment
In the Americas, revenues rose 7.7% year over year to $439.1 million, primarily driven by favorable price and continued strength in electronic product categories. Organic revenues improved 2.7% from the prior-year quarter.
During an earnings call with investors Thursday, the company stated its Americas residential business saw mid-single-digit growth; the non-residential products, excluding acquisitions, experienced low-single-digit growth.
“If we look closer at the Americas business, end-market fundamentals remain solid as we continue to see positive indicators in non-residential verticals and expect momentum in single-family construction to continue to support solid residential markets,” Allegion President and CEO David Petratis said.
Yet, Petratis expressed that due to ongoing constraints across the construction supply chain — including labor — the industry is still experiencing delays in overall project construction. This is impacting the company’s timing of its revenue and creates choppiness from quarter-to-quarter.
“This results in a healthy construction backlog, which we see across the U.S.,” he said. “According to the Associated Builders and Contractors Inc., backlogs in the construction channel are at highs for the decade, which we believe leads to a longer cycle.”
Petratis made mention of the company taking home the SIA New Product Showcase (NPS) Judges’ Choice award at ISC West 2018 for its Von Duprin Remote Undogging and Monitoring Kit. The latest Von Duprin solutions were designed to enhance perimeter security in K-12 facilities by enabling remote daily lockup, centralized emergency lockdown and door status monitoring, he said.
“We know America’s 100,000 K-12 public schools are on average more than 40 years old, many haven’t been supplied with the mechanical and technological advancements created to better protect students, teachers and administration,” he said. “Allegion is working with industry organizations, law enforcement officials, educators, parents and others to drive recognition of school security infrastructure needs among government officials at the state and federal level.”
Elswhere, the Europe, Middle East, India and Africa (EMEIA) segment rose 26.9%, up 5.9% on an organic basis. This reflects solid volume, favorable price, favorable foreign currency and contributions from the QMI acquisition, according to the company. Organic revenues were up 5.9% on a year-over-year basis.
The Asia-Pacific segment revenues increased 3.9% compared to the same period the prior year $23.7 million. The company credited favorable currency impact for the improvement. Organically, revenues inched up .2%.
If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our FREE digital newsletters!
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.
A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!
Leave a Reply