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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 Q3 Earnings Beat Estimates
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.
Revenues and Bookings
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.
Operating Margin Performance
Adjusted operating income was $56.9 billion, down 31% year over year. Adjusted operating margin squeezed 290 basis points to 19.1%.
Key Balance Sheet and Cash Flow Figures
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.
2024 Guidance
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
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.