Can Allegion (ALLE) Pull A Surprise This Earnings Season?
Zacks Investment Research | Jul 25, 2017 10:37PM ET
Allegion plc (NYSE:ALLE) , a provider of safety and security products, is scheduled to release second-quarter 2017 results, before the opening bell on Jul 27.
In the last reported quarter, the company had delivered a positive 5.8% earnings surprise. Notably, the company surpassed the Zacks Consensus Estimate in only two of the last four quarters, resulting in an average earnings beat of 2.01%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
A look at estimate revisions lends us an idea of analyst expectations right before a company’s earnings release. The Zacks Consensus Estimate for second-quarter earnings per share increased by 1 cent in the past 60 days to $1.00. This reflects a year-over-year increase of 1.3%. Further, analysts polled by Zacks project revenues of $613.4 million for the said quarter, reflecting a 4.9% increase from a year ago.
Allegion continues to benefit from its acquisition drive. The company broadens its product portfolio as well as geographic footprint and enhances its position in strategic market segments through buyouts. Recently acquired McKenzie-based Republic Doors & Frames is expected to expand its product line, improve operating efficiency and expand its distribution footprint. This addition is expected to boost sales in the to-be-reported quarter
The company’s Americas segment has been performing well, accounting for 74.3% of total revenue in the first quarter. Overall 8% organic growth in the first quarter was driven by strong performance in the Americas segment, reflecting continued strength in the region’s channel initiatives, synergies from new product introductions, electronics growth and strong demand in both non-residential and residential businesses. We expect this trend to continue in the to-be-reported quarter.
However, we are concerned about economic slowdown in certain pockets of the world where Allegion has considerable presence. Moreover, owing to the company’s substantial international presence, volatile currency translations could prove to be a significant headwind.
Earnings Whispers
Our proven model does not conclusively show that Allegion is likely to beat earnings this quarter. That is because a stock needs to have both a positive Original post
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