Allegion plc’s ALLE fourth-quarter 2024 adjusted earnings of $1.86 per share beat the Zacks Consensus Estimate of $1.74. The bottom line increased 10.7% year over year.

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ALLE’s Revenue Details

Allegion’s revenues were $945.6 million, which increased 5.4% year over year. Organic revenues increased 3.5%, driven by price realization and volume growth in the Americas region. Revenues beat the Zacks Consensus Estimate of $939 million.

Acquired assets boosted revenues by 2%. Forex woes left an adverse impact of 0.1%.

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

Revenues from Allegion Americas increased 6.4% year over year to $750 million. The figure accounted for 79.3% of the quarter’s revenues. Our estimate for segmental revenues was $736.8 million. Organic revenues increased 4.6%, driven by residential and non-residential businesses, which grew in high-single digits and mid-single digits, respectively.

Operating income for the segment was $193.8 million, up 10.7% year over year. Our estimate was $188.6 million.

Revenues from Allegion International were $195.6 million, up 1.5% year over year. The metric accounted for 20.7% of the quarter’s revenues. Our estimate for segmental revenues was $201.6 million. Organic revenues inched down 0.7%, due to lower volume, partially offset by price realization.

Segmental operating income was $17.7 million, down 1.1% year over year. Our estimate was $21.6 million.

Allegion’s Margin Profile

In the quarter, Allegion’s cost of revenues increased 3.3% year over year to $528.9 million. Gross profit was $416.7 million, up 8.1% year over year, while the gross margin jumped 120 basis points (bps) to 44.1%.

Selling and administrative expenses increased 6.4% year over year to $232.1 million. Adjusted EBITDA was $223.6 million, reflecting a year-over-year increase of 6.2%. The margin grew 10 bps year over year to 23.6%.

Adjusted operating income increased 6% year over year to $209.1 million. The adjusted margin was 22.1%, up 10 bps. Interest expenses were $25.2 million, up 10% year over year. The effective tax rate was 11.2%, down from 13.4% in the year-ago quarter.

ALLE’s Balance Sheet and Cash Flow

While exiting fourth-quarter 2024, Allegion had cash and cash equivalents of $503.8 million compared with $468.1 million at the end of 2023. Long-term debt was $1.98 billion compared with $1.60 billion at the end of 2023.

In 2024, ALLE generated net cash of $675 million from operating activities, reflecting an increase of 12.3% year over year. Capital expenditure was $92.1 million, up 9.3% year over year. For the year, the available cash flow was $582.9 million.

Allegion repurchased shares for $220 million. Dividends paid out totaled $166.9 million, reflecting an increase of 5.2% year over year.

Allegion’s 2025 Outlook

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%.

Zacks Rank & Key Picks

The company currently carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the same sector:

Enersys ENS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ENS delivered a trailing four-quarter average earnings surprise of 2.2%. In the past 60 days, the consensus estimate for Enersys’ fiscal 2025 (ending March 2025) earnings has increased 12.4%.

RBC Bearings Incorporated RBC presently sports a Zacks Rank of 1. RBC delivered a trailing four-quarter average earnings surprise of 5%.

In the past 60 days, the consensus estimate for RBC’s fiscal 2025 (ending March 2025) earnings has increased 1%.

Cadre Holdings, Inc. CDRE presently carries a Zacks Rank #2 (Buy). CDRE delivered a trailing four-quarter average earnings surprise of 19.1%.

In the past 60 days, the consensus estimate for CDRE’s 2025 earnings has increased 3%.

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