ALLEGION REPORTS THIRD-QUARTER 2017 FINANCIAL RESULTS
Third-quarter 2017 net earnings per share (EPS) of $0.94, compared with 2016 EPS of $0.02; Adjusted 2017 EPS of $1.02, up 9.7 percent compared with 2016 adjusted EPS of $0.93
Third-quarter 2017 revenue of $609.4 million, up 4.9 percent compared to 2016, up 2.7 percent on an organic basis
Third-quarter 2017 operating margin of 20.7 percent, compared with 2016 operating margin of 20.9 percent; Adjusted operating margin of 22.1 percent, improved 30 basis points compared with 2016 adjusted operating margin of 21.8 percent
Updating guidance for 2017 full-year revenue and EPS outlook; Full-year 2017 reported revenue growth of 6.5 to 7 percent with organic revenue growth of 5 to 5.5 percent; Full-year 2017 EPS guidance of $3.21 to $3.26 and $3.75 to $3.80 on an adjusted basis
DUBLIN (Oct. 26, 2017) - Allegion plc (NYSE: ALLE), a leading global provider of security products and solutions, today reported third-quarter 2017 net revenues of $609.4 million and net earnings of $89.8 million, or $0.94 per share, up $0.92 per share when compared with third-quarter 2016 EPS of $0.02. Third-quarter 2016 EPS included a $0.87 per share reduction from a loss on divestiture. Excluding charges related to restructuring and acquisitions as well as charges related to the refinancing of the company’s credit facility, third-quarter 2017 adjusted net earnings were $97.4 million, or $1.02 per share, up 9.7 percent when compared with third-quarter 2016 adjusted EPS of $0.93.
Third-quarter net revenues increased 4.9 percent, when compared to the prior year period (up 2.7 percent on an organic basis). Reported revenues reflect continued organic growth, contribution from acquisitions and benefits from foreign currency.
“I am pleased with our performance so far this year that has resulted in strong organic growth, led by our Americas region,” said David D. Petratis, Allegion chairman, president and CEO. “Organic growth in the third quarter was modest, as European markets rebound, and Americas’ end-market fundamentals continue to remain solid, including electronics growth. However, constraints across the construction supply chain, including labor, continue to impact the completion of projects and, therefore, the timing of our revenue.”
The Americas segment revenue increased 4.4 percent (up 2.8 percent on an organic basis). The revenue growth was driven by favorable price and mid-teens growth in electronics, which offset the impact of timing of orders that was a positive benefit in the second quarter. Revenues from acquisitions and the impact of favorable foreign currency also added to overall growth.
The EMEIA segment revenues were up 7.5 percent (up 3.1 percent on an organic basis), reflecting solid pricing in the quarter along with favorable currency impacts. Strong growth in the portable security and SimonsVoss businesses also contributed to the organic growth.
The Asia-Pacific segment revenues increased 2.1 percent, when compared to the prior year period (up 0.4 percent on an organic basis). Favorable price and currency impacts drove the revenue growth for the quarter.
Third-quarter 2017 operating income was $126.1 million, an increase of $4.6 million or 3.8 percent over 2016. Adjusted operating income in third-quarter 2017 was $134.6 million, representing an increase of $7.9 million or 6.2 percent compared to 2016.
Third-quarter 2017 operating margin was 20.7 percent, compared with 20.9 percent in 2016. The adjusted operating margin in third-quarter 2017 was 22.1 percent, compared with 21.8 percent in 2016. The 30-basis-point improvement in adjusted operating margin was driven by strong price performance, volume leverage and productivity, which more than offset unfavorable product mix, increased investments and inflation.
“Overall margins continue to expand even while we invest in the business,” Petratis added. “I am particularly pleased with the pricing performance in a rising inflationary environment and with the margin performance of the EMEIA region, which saw substantial improvement versus the comparable quarter last year.”
Interest expense for third-quarter 2017 was $17.8 million, up from the $15.6 million for third-quarter 2016. Expense in 2017 included $1.6 million of costs associated with the company’s refinancing of its credit facility, which closed in September. As a result of the recently completed debt refinancing, the company expects to see annualized interest savings of approximately $13 million ($0.09 per share), which will commence in the fourth quarter of 2017, where the company will see a quarter’s worth of that savings.
Other income net for third-quarter 2017 was $3.7 million, driven by non-operating gains. This compares to other expense net for third-quarter 2016 of $0.4 million.
The third-quarter 2016 also included a loss on divestiture in the amount of $84.4 million related to the divested system integration business located in China.
The following information was filed by Allegion Plc (ALLE) on Thursday, October 26, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.