Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide insights into the growth and future outlook of Trane Technologies' Service business, given its recent performance? A: The Service business has shown impressive growth, with revenues reaching $6.5 billion, growing at a rate close to 10% annually. The business is designed around applied solutions, and as these solutions become more complex, the propensity for OEMs to perform service work increases. We maintain a high single-digit growth guide, but recent performance has been in the double-digit range. The business is resilient and operates efficiently, contributing significantly to our overall performance. - David Regnery, CEO
Q: How is Trane Technologies performing in the Commercial HVAC sector, and what are the expectations for future growth across various verticals? A: Our Commercial HVAC business continues to see strong growth, with orders up high single digits and a robust pipeline. We track 14 verticals, with growth observed in 13 of them, including data centers and education. Despite challenges in the life sciences vertical, we remain optimistic. Our broad portfolio and direct sales force enable us to serve multiple verticals effectively, driving broad-based growth. - David Regnery, CEO
Q: What is the outlook for Trane Technologies' organic sales growth in 2025, considering potential headwinds and tailwinds? A: We anticipate 7% to 8% organic revenue growth in 2025, with a steady performance throughout the year. Residential markets are expected to return to a GDP+ framework, with a modest prebuy impact in Q1. Transport markets are projected to bottom in the first half, with recovery expected in the second half. Commercial HVAC is expected to continue its strong performance, contributing significantly to our growth. - Christopher Kuehn, CFO
Q: How does Trane Technologies view the impact of pricing on its 2025 revenue growth, particularly in the residential segment? A: For 2025, we expect pricing to contribute about 1 to 1.5 points to revenue growth. The transition to the lower refrigerant, 454B, will be reported as volume, not price, impacting 65% of the portfolio for about three-quarters of the year. Overall, we anticipate a balanced contribution from volume and price to our revenue growth. - Christopher Kuehn, CFO
Q: Can you elaborate on Trane Technologies' strategy and recent investments in channel expansion, particularly in Europe? A: We have been acquiring independent channels in our Commercial HVAC business, a strategy we've pursued for some time. These acquisitions are opportunistic and quickly become accretive. Recently, we acquired a channel in Belgium, continuing our approach to strengthen our direct sales capabilities and enhance our market presence. - David Regnery, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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