Allegion plc’s (ALLE - Free Report) fourth-quarter 2017 adjusted earnings came in at $1.11 per share, beating with the Zacks Consensus Estimate of 94 cents. Adjusted earnings were up a significant 37% from the prior-year quarter.
 
Quarterly net revenues of $623 million also surpassed the consensus mark of $609.7 million. The figure increased 9.4% on a year-over-year basis on the back of continued organic growth, synergies from acquisitions and favorable foreign currency impact. Revenues were also up 6.1% on an organic basis, much higher than 2.7% growth registered in the prior quarter.

Segment Details

Revenues at the Americas segment rose 6.4% year over year to $436.1 million, primarily driven by favorable price and growth in mechanical products along with continued strength in electronic product categories.  Organic revenues also increased 4.8% from the prior-year quarter.

The EMEIA (Europe, Middle East, India and Africa) segment was up 16.5% to $150.8 million, driven by robust pricing in the quarter, and solid growth across most business units and geographies. Organically, revenues were up 7.7% on a year-over-year basis.

Revenues at the Asia-Pacific segment rose 19.1% from the year-ago quarter to $36.1 million on the back of favorable currency impact. Organically, revenues were up 16.4%.

Margins

Adjusted operating margin was 21.7%, up 380 basis points (bps) year over year owing to solid volume leverage and productivity, offsetting negative impacts from increased investments and inflation. Adjusted EBITDA margin was up 480 bps to 30%.

Financials

Allegion ended the quarter with cash and cash equivalents of $466.2 million, as of Dec 31, 2017, compared with $312.4 million as of Dec 31, 2016.

Available cash flow, as of Dec 31, 2017, was $297.9 million, lower than $335 million in 2016, due to a discretionary pension funding payment of $50 million in the first quarter, partially offset by an increase in earnings.

Capital expenditures totaled $49.3 million in 2017, compared with $42.5 million a year ago.

2017 Highlights

Total revenues came in at $2.4 billion, up 7.6% from $2.2 billion in 2016. Organically, revenues increased 5.7%. The upside was driven by positive organic growth along with contributions from acquisitions and favorable currency. Adjusted earnings were $3.96 per share, up 18.6% year over year.

2018 Guidance

Adjusted earnings per share are now expected in the range of $4.35 to $4.50, reflecting an increase of 9.8% to 13.6% from adjusted 2017 EPS.

The company expects full-year 2017 revenue growth in the band of 10.5-11.5% on a year-over-year basis. Organically, revenues are expected in the 4-5% range.

Full-year adjusted effective tax rate is anticipated at 16%.

Available cash flow is targeted at approximately $380-$400 million.

Allegion PLC Price, Consensus and EPS Surprise

Allegion PLC Price, Consensus and EPS Surprise | Allegion PLC Quote

Zacks Rank & Key Picks

The company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few better-ranked stocks in the Industrial Products sector are Alarm.Com Holdings, Inc. (ALRM  - Free Report), Fortune Brands Home & Security, Inc. (FBHS - Free Report) and Hubbell Incorporated (HUBB  - Free Report).

Alarm.Com sports a Zacks Rank #2 (Buy). 2018 earnings for Alarm.Com are expected to increase 4.9%.

Fortune Brands, also a Zacks Rank #2 stock, is anticipated to witness 17.9% earnings growth in 2018.

Hubbell, also a Zacks Rank #2 stock, is expected to witness 21.4% earnings growth in 2018.