It has been about a month since the last earnings report for Trane Technologies (TT). Shares have added about 12.4% 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 the most recent earnings report in order to get a better handle on the important drivers.
Trane Technologies reported better-than-expected third-quarter 2024 results.
Adjusted EPS of $3.37 surpassed the Zacks Consensus Estimate by 4.3% and increased 20.8% year over year.
Revenues of $5.4 billion beat the consensus mark by 2.4% and increased 11% year over year on a reported basis and organically. Bookings were up 5% year over year on a reported basis and organically.
The Americas segment’s revenues of $4.5 billion were higher than our estimate of $4 billion and increased 15% year over year on a reported basis and organically. Bookings were up 8% on a reported basis and organically, at $4.3 billion.
Europe, Middle East, and Africa segment’s revenues came in at $667.8 million, up 8% year over year on a reported basis and organically, missing our estimate of $661.2 million. Bookings were up 9% year over year on a reported basis and organically, at $637 million.
Revenues from the Asia Pacific segment were down 21% year over year on a reported basis and organically to $298.5 million, missing our estimate of $437.5 million. Bookings of $279 million decreased 30% on a reported basis and 31% organically.
Adjusted operating income was $56.9 billion, down 31% year over year. Adjusted operating margin squeezed 290 basis points to 19.1%.
Trane ended the quarter with a cash balance of $2.3 billion compared with $959 million in the previous quarter. The debt balance was $5.3 billion, flat with the previous quarter. The company generated $1.3 billion of cash from operating activities and free cash of $1.2 billion in the quarter.
The company raised its 2024 guidance. It currently expects revenues to increase 11% compared with the previous expectation of 10% growth.
Adjusted EPS is expected to be around $11.1 compared with the previous anticipation of $10.8.
In the past month, investors have witnessed an upward trend in fresh estimates.
At this time, Trane Technologies has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
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 #2 (Buy). We expect an above average return from the stock in the next few months.
Trane Technologies is part of the Zacks Building Products - Air Conditioner and Heating industry. Over the past month, Watsco (WSO), a stock from the same industry, has gained 17.3%. The company reported its results for the quarter ended September 2024 more than a month ago.
Watsco reported revenues of $2.16 billion in the last reported quarter, representing a year-over-year change of +1.6%. EPS of $4.22 for the same period compares with $4.35 a year ago.
For the current quarter, Watsco is expected to post earnings of $2.07 per share, indicating a change of +0.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.7% over the last 30 days.
Watsco has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Trane Technologies plc (TT) : Free Stock Analysis Report
Watsco, Inc. (WSO) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.