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Trane Technologies (TT) Up 6.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Trane Technologies (TT - Free Report) . Shares have added about 6.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Trane Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Adjusted EPS of $3.3 surpassed the Zacks Consensus Estimate by 7.1% and increased 23.1% year over year.
Revenues of $5.3 billion beat the consensus mark by 3.8% and increased 13% year over year on a reported basis, as well as organically. Bookings were up 19% year over year on a reported basis, as well as organically.
Revenues and Bookings
The Americas segment’s revenues of $4.3 billion were higher than our estimate of $4 billion and increased 16% year over year on a reported basis, as well as organically. Bookings were up 23% on a reported basis, as well as organically, at $4.2 billion.
Europe, Middle East, and Africa segment’s revenues came in at $645.3 million, up 4% year over year on a reported basis and 5% organically, missing our estimate of $661.2 million. Bookings were up 10% year over year on a reported basis, as well as organically, at $669.4 million.
Revenues from the Asia Pacific segment were down 6% year over year on a reported basis and 3% on an organic basis, to $371.2 million, missing our estimate of $437.5 million. Bookings of $448.8 million decreased 3% on a reported basis and were flat organically.
Operating Margin Performance
Adjusted operating income came in at $1 billion, up 21% year over year. Adjusted operating margin improved 140 basis points to 19.4%.
Key Balance Sheet and Cash Flow Figures
Trane ended the quarter with a cash balance of $959 million compared with $850 million in the previous quarter. The debt balance was $5.3 billion compared with $4.9 billion in the previous quarter. It generated $696 million of cash from operating activities and free cash of $635 million in the quarter.
2024 Guidance
The company raised its 2024 guidance. It currently expects revenues to increase around 10% compared with the previous expectation of 8% to 9% growth. Adjusted EPS is expected to be around $10.80 compared with the previous anticipation of $10.30 to $10.40.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Trane Technologies has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Trane Technologies has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Trane Technologies (TT) Up 6.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Trane Technologies (TT - Free Report) . Shares have added about 6.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Trane Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Trane Technologies Q2 Earnings Beat Estimates
Trane Technologies reported better-than-expected second-quarter 2024 results.
Adjusted EPS of $3.3 surpassed the Zacks Consensus Estimate by 7.1% and increased 23.1% year over year.
Revenues of $5.3 billion beat the consensus mark by 3.8% and increased 13% year over year on a reported basis, as well as organically. Bookings were up 19% year over year on a reported basis, as well as organically.
Revenues and Bookings
The Americas segment’s revenues of $4.3 billion were higher than our estimate of $4 billion and increased 16% year over year on a reported basis, as well as organically. Bookings were up 23% on a reported basis, as well as organically, at $4.2 billion.
Europe, Middle East, and Africa segment’s revenues came in at $645.3 million, up 4% year over year on a reported basis and 5% organically, missing our estimate of $661.2 million. Bookings were up 10% year over year on a reported basis, as well as organically, at $669.4 million.
Revenues from the Asia Pacific segment were down 6% year over year on a reported basis and 3% on an organic basis, to $371.2 million, missing our estimate of $437.5 million. Bookings of $448.8 million decreased 3% on a reported basis and were flat organically.
Operating Margin Performance
Adjusted operating income came in at $1 billion, up 21% year over year. Adjusted operating margin improved 140 basis points to 19.4%.
Key Balance Sheet and Cash Flow Figures
Trane ended the quarter with a cash balance of $959 million compared with $850 million in the previous quarter. The debt balance was $5.3 billion compared with $4.9 billion in the previous quarter. It generated $696 million of cash from operating activities and free cash of $635 million in the quarter.
2024 Guidance
The company raised its 2024 guidance. It currently expects revenues to increase around 10% compared with the previous expectation of 8% to 9% growth. Adjusted EPS is expected to be around $10.80 compared with the previous anticipation of $10.30 to $10.40.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Trane Technologies has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Trane Technologies has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.