Trane, Inc. (TT) Tops Q4 EPS by 11c, Revenues Beat; Offers FY21 EPS Guidance Above Consensus

Trane, Inc. (NYSE: TT) reported Q4 EPS of $1.03, $0.11 better than the analyst estimate of $0.92. Revenue for the quarter came in at $3.18 billion versus the consensus estimate of $3.08 billion.

Highlights (fourth-quarter 2020 versus fourth-quarter 2019, unless otherwise noted):

• GAAP operating margin up 180 bps and adjusted operating margin* up 150 bps
• GAAP continuing EPS of $1.01; adjusted continuing EPS* of $1.03, up 12 percent
• GAAP full-year continuing EPS of $4.02; adjusted continuing EPS* of $4.46
• Exceptional cash conversion for full-year 2020; cash from continuing operating activities of $1.8 billion; free cash flow* of $1.7 billion, 158 percent of adjusted net earnings*

“I want to thank our team members around the globe for their strong commitment to helping our customers solve some of the world’s most pressing problems,” said Mike Lamach, chairman and CEO of Trane Technologies. “Even as the world was coming to terms with the widespread impact of COVID-19, we successfully completed our Reverse Morris Trust transaction and positioned Trane Technologies to not only weather the crisis, but to emerge even stronger.

“We continued to invest in our businesses, develop and launch new products and deliver innovative customer solutions on electrification of heating and transport, enhanced indoor environmental quality, and precise temperature control along the full vaccine cold chain. In the fourth quarter, we delivered solid bookings growth, flat revenue, strong margin expansion and compelling EPS growth. We finished 2020 with exceptional full-year free cash flow of $1.7 billion, or 158% of adjusted net earnings. In addition, we accelerated our business transformation to deliver an expected $300 million in savings by 2023 to further bolster shareholder value through greater levels of business reinvestment, continued market outgrowth and strong, sustainable leverage.

“Despite ongoing pandemic-related challenges in 2021, we remain confident that we have the fundamental ingredients for another year of resilient financial performance, strong free cash flow and balanced capital deployment that will deliver continued, differentiated returns for shareholders. We expect strong adjusted earnings per share in 2021, guiding to a range of $5.30 to $5.50, up 19% to 23%.”

GUIDANCE:

Trane, Inc. sees FY2021 EPS of $5.30-$5.50, versus the consensus of $5.17.

• GAAP continuing EPS of $5.05 to $5.25, including EPS of $(0.25) for transformation and other restructuring costs; adjusted EPS of $5.30 to $5.50, up 19 percent to 23 percent.
• Additional information regarding the company's 2021 guidance is included in the company's earnings presentation found at www.tranetechnologies.com in the Investor Relations section.

For earnings history and earnings-related data on Trane, Inc. (TT) click here.

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