Allegion Q4 Earnings & Revenues Top, Issues '18 View

Allegion plc’s (ALLE - Free Report) fourth-quarter 2017 adjusted earnings came in at $1.11 per share, beating with the Zacks Consensus Estimate of 94 cents. Adjusted earnings were up a significant 37% from the prior-year quarter.
 
Quarterly net revenues of $623 million also surpassed the consensus mark of $609.7 million. The figure increased 9.4% on a year-over-year basis on the back of continued organic growth, synergies from acquisitions and favorable foreign currency impact. Revenues were also up 6.1% on an organic basis, much higher than 2.7% growth registered in the prior quarter.

Segment Details

Revenues at the Americas segment rose 6.4% year over year to $436.1 million, primarily driven by favorable price and growth in mechanical products along with continued strength in electronic product categories.  Organic revenues also increased 4.8% from the prior-year quarter.

The EMEIA (Europe, Middle East, India and Africa) segment was up 16.5% to $150.8 million, driven by robust pricing in the quarter, and solid growth across most business units and geographies. Organically, revenues were up 7.7% on a year-over-year basis.

Revenues at the Asia-Pacific segment rose 19.1% from the year-ago quarter to $36.1 million on the back of favorable currency impact. Organically, revenues were up 16.4%.

Margins

Adjusted operating margin was 21.7%, up 380 basis points (bps) year over year owing to solid volume leverage and productivity, offsetting negative impacts from increased investments and inflation. Adjusted EBITDA margin was up 480 bps to 30%.

Financials

Allegion ended the quarter with cash and cash equivalents of $466.2 million, as of Dec 31, 2017, compared with $312.4 million as of Dec 31, 2016.

Available cash flow, as of Dec 31, 2017, was $297.9 million, lower than $335 million in 2016, due to a discretionary pension funding payment of $50 million in the first quarter, partially offset by an increase in earnings.

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