Allegion plc (NYSE: ALLE) reported Q2 EPS of $1.25, $0.06 better than the analyst estimate of $1.19. Revenue for the quarter came in at $704.7 million versus the consensus estimate of $697.84 million.

• Second-quarter 2018 net earnings per share (EPS) of $1.19, compared with 2017 EPS of $1.10; Adjusted 2018 EPS of $1.25, up 12.6 percent compared with 2017 adjusted EPS of $1.11
• Second-quarter 2018 revenue of $704.7 million, up 12.4 percent compared to 2017, up 5.2 percent on an organic basis
• Second-quarter 2018 operating margin of 20.3 percent, compared with 2017 operating margin of 21.5 percent; Adjusted operating margin of 21.3 percent, declined 50 basis points compared with 2017 adjusted operating margin of 21.8 percent due to dilution from acquisitions
• Updating outlook for 2018 full-year revenue and full-year EPS; Full-year 2018 reported revenue growth of 12.5 to 13.5 percent and organic revenue growth of 4 to 5 percent; Full-year 2018 EPS outlook of $4.15 to $4.35 and $4.35 to $4.50 per share on an adjusted basis

“We are pleased to report another quarter of solid performance highlighted by growth in revenue, adjusted operating income and adjusted EPS,” said David D. Petratis, Allegion chairman, president and CEO. “We delivered double-digit top-line revenue growth, and saw organic growth rebound nicely back into the mid-single digits. The solid organic growth for the company was driven by strong Americas performance. End-market fundamentals remain positive, and we continue to be led by high-teens electronics growth in the Americas.

“I am also pleased with the nearly 13-percent increase in adjusted EPS during a high inflationary environment, highlighting our focus to drive increased shareholder returns. Inflationary pressures continued to challenge operating margins in the quarter. Excluding the acquisitions, the base business margins were flat year over year, as the global team drove price, productivity and other cost savings to combat the significant inflation headwinds,” Petratis added.

2018 Outlook

The company is updating the full-year 2018 revenue outlook to reflect total growth of 12.5 to 13.5 percent and confirming organic growth of 4 to 5 percent compared to 2017.

The company is updating full-year 2018 reported EPS to a range of $4.15 to $4.35, and adjusted EPS remains at $4.35 to $4.50 per share. Adjustments to 2018 EPS include estimated impacts for restructuring and acquisition activities. The outlook assumes investment spend at approximately $0.15 per share, a full-year adjusted effective tax rate of approximately 15 to 16 percent, as well as an average diluted share count for the full year of approximately 96 million shares.

The company continues to target full-year available cash flow of approximately $380 to $400 million.

GUIDANCE:

Allegion plc sees FY2018 EPS of $4.35-$4.50, versus the consensus of $4.45.

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