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Allegion (ALLE) to Post Q4 Earnings: What's in the Offing?

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Allegion plc (ALLE - Free Report) is scheduled to release fourth-quarter 2022 results on Feb 22, before market open.

The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 8.8%.

Let’s see how things are shaping up for Allegion this earnings season.

Allegion PLC Price and EPS Surprise

Allegion PLC Price and EPS Surprise

Allegion PLC price-eps-surprise | Allegion PLC Quote

Factors to Note

Allegion’s fourth-quarter performance is expected to have benefited from strong demand across end markets and effective pricing actions. Strength in non-residential and electronics end markets is likely to have aided the Allegion Americas segment. The Zacks Consensus Estimate for Allegion Americas indicates a 36.2% jump from the year-ago reported number. We expect segmental revenues to jump 36.4% from the fourth quarter  2021 reported number.

The Access Technologies acquisition is expected to have boosted ALLE’s top line. The Zacks Consensus Estimate for total revenues in the fourth quarter suggests a 19.7% increase from the year-ago reported number. We expect fourth-quarter revenues to climb 19.4% from the year-ago period.

However, the Allegion International segment is likely to reflect a year-over-year decline in revenues due to softness in mechanical products. The consensus mark for Allegion International segment revenues hints at a 20.9% drop from the year-ago reported number. We expect Allegion International’s revenues to decline 21.1% year over year.

Labor, material and freight-related cost inflation are likely to have affected margins in the to-be-reported quarter. Supply-chain disruptions, including shortage of electronic chips and other parts, are likely to have weighed on performance.

Given ALLE’s substantial international presence, a stronger U.S. dollar might have depressed its overseas business performance.

Earnings Whispers

Our proven model predicts an earnings beat for Allegion this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Allegion has an Earnings ESP of +4.19% as the Most Accurate Estimate is pegged at $1.43, higher than the Zacks Consensus Estimate of $1.37. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Allegion currently carries a Zacks Rank #2.

Highlights of Q3 Earnings

Allegion reported third-quarter 2022 adjusted earnings of $1.64 per share, which surpassed the Zacks Consensus Estimate of $1.45. The bottom line increased 5.1% from the year-ago period. Total revenues of $913.7 million outperformed the Zacks Consensus Estimate of $873 million and jumped 27.4% year over year. Results benefited from robust price realization and strong volume in the Allegion Americas businesses.

Other Stocks to Consider

Here are some other companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.

AptarGroup (ATR - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #3. The company is scheduled to release fourth-quarter 2022 results on Feb 16.

The Zacks Consensus Estimate for AptarGroup’s fourth-quarter earnings has been revised upward by a penny in the past 60 days. The company pulled off a trailing four-quarter earnings surprise of 0.8%, on average.

DMC Global (BOOM - Free Report) has an Earnings ESP of +7.86% and a Zacks Rank #3. The company is slated to release fourth-quarter results on Feb 23.

The Zacks Consensus Estimate for DMC Global’s fourth-quarter earnings has been revised northward by 15.4% in the past 60 days. The company delivered a trailing four-quarter earnings surprise of 126%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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