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ALLE NYSE· Allegion PLC
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ALLE NYSE· Allegion PLC
Earnings report Q4 2023

ALLE Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

ALLE's net revenues for the year ended December 31, 2023, increased by 11.6%, or $378.9 million, compared to the previous year. This growth can be attributed to the following factors: pricing contributed 7.5%, acquisitions/divestitures contributed 6.2%, and currency exchange rates contributed 0.2%. However, there was a slight decline in volume by 2.3%.

The breakdown of net revenues by reportable segments is as follows:

  • Allegion Americas: Net revenues increased from $2,530.7 million in 2022 to $2,913.6 million in 2023, representing a growth of 14.9%. This segment's operating income also improved, reaching $757.2 million with an operating margin of 26.0%.
  • Allegion International: Net revenues slightly decreased from $741.2 million in 2022 to $737.2 million in 2023, reflecting a decline of 0.5%. The segment's operating income decreased to $58.1 million, resulting in an operating margin of 7.9%.

Strengths

ALLE demonstrated strong revenue growth in the latest quarter, driven primarily by pricing and acquisitions/divestitures. The Allegion Americas segment performed exceptionally well, with a significant increase in net revenues and operating income. This growth can be attributed to successful pricing strategies and the company's ability to capitalize on acquisition opportunities. Management's focus on expanding the business through strategic acquisitions has proven to be a strength for ALLE.

Challenges

Despite the overall revenue growth, the Allegion International segment experienced a slight decline in net revenues. This could be a result of various factors, such as market conditions or competitive pressures in international markets. ALLE should closely monitor this segment and implement strategies to address any challenges it may face.

Noteworthy

It is worth mentioning that ALLE's net revenues reached a record high of $3,650.8 million in the latest quarter, reflecting the company's strong performance. Additionally, the Allegion Americas segment achieved a significant increase in operating income, indicating improved profitability.

Summary

ALLE delivered a strong financial performance in the latest quarter, with a notable increase in net revenues. The company's focus on pricing strategies and successful acquisitions/divestitures contributed to this growth. While the Allegion Americas segment performed exceptionally well, the Allegion International segment faced some challenges. ALLE should continue to capitalize on its strengths and address any weaknesses to sustain its growth trajectory. Overall, ALLE's revenue growth demonstrates its ability to navigate market conditions and deliver value to its shareholders.

Source documents

Form 10-K  filed on Feb 20, 2024
77 pages scanned

Reference data

Company financials Q4 revenue 897M
Analyst estimates Q4 EPS missed by -3.56%
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