Allegion releases second-quarter financial results

DUBLIN – Allegion recently released its second-quarter financial results, with a healthy stable outlook for the rest of the year.

The global provider of security products and solutions posted Q2 2022 net revenues of $773.1 million and net earnings of $115.1 million, or $1.30 per share. Excluding charges related to restructuring, acquisition and integration expenses, debt financing, as well as non-operating investment gains, adjusted net earnings were $121.1 million, or $1.37 per share, up 3.8 percent when compared with second-quarter 2021 adjusted earnings per share (EPS) of $1.32.

Allegion revised its full-year revenue growth outlook to a range of 13-14 percent reported and 9-10 percent organic. Those numbers are inclusive of Allegion’s recently closed acquisition of Stanley Access Technologies LLC.

The company credits its organic revenue increase to volume done by its Americas non-residential business, which helped to offset the weakness seen in its Allegion Americas residential and international business.

“Allegion continues to deliver sequential improvements with the second-quarter results in the face of tough macroeconomic conditions,” said Allegion Executive Chairman David D. Petratis, who served as Allegion president and CEO through second quarter 2022. “Americas nonresidential markets were strong, and we were able to deliver significant price realization in all regions. While electronic components challenges continue, our supply chain actions, over the last year, are resulting in improving components availability.” Petratis was succeeded by John H. Stone as Allegion’s president and CEO on July 11.

The Allegion Americas segment Q2 revenues increased 7.8 percent (up 8 percent on an organic basis). The organic increase was driven by strong price realization that was slightly offset by lower volumes in the residential business. The non-residential business grew high-teens percent, driven by price realization and volume. The residential business declined mid-teens percent, driven by continued electronic parts shortages and a prior-year catch-up on COVID-related backlogs that built during 2020, both of which more than offset price, according to the company.

Allegion International segment revenues declined 8.5 percent (up 1.9 percent on an organic basis). The organic increase was driven by price realization in the region offsetting softening volumes that were driven by COVID-19 lockdowns in China and geopolitical challenges. The reported revenue reflects the negative impact of currency movements in the region.

In addition, second-quarter 2022 operating income was $147.1 million, an increase of $1.7 million or 1.2 percent compared to 2021. Adjusted operating income in second-quarter 2022 was $154.9 million, an increase of $8.7 million or 6 percent compared to 2021.

Second-quarter 2022 operating margin was 19 percent, compared with 19.5 percent in 2021. The adjusted operating margin in second-quarter 2022 was 20 percent, compared with 19.6 percent in 2021. Allegion noted that the 40-basis-point increase in adjusted operating margin is attributable to price and productivity exceeding inflation and positive business mix offsetting pressure from incremental investments.

Allegion’s full second-quarter financial report can be read at  www.allegion.com/corp/en/news/year/2022/q2-financial-results.html.