Yahoo Finance Why Is Trane Technologies (TT) Up 2.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Trane Technologies (TT). Shares have added about 2.3% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Trane Technologies Q1 Earnings Beat Estimates
Trane Technologies reported better-than-expected first-quarter 2024 results.
Adjusted EPS of $1.94 surpassed the Zacks Consensus Estimate by 18.3% and increased 37.6% year over year.
Revenues of $4.2 billion beat the consensus mark by 5.7% and increased 15% year over year on a reported basis and 14% organically. Bookings were up 18% year over year on a reported basis and 17% organically.
Revenues and Bookings
The Americas segment’s revenues of $3.3 billion were higher than our estimate of $3.1 billion and increased 17% year over year on a reported basis and 15% organically. Bookings were up 21% on a reported basis and 20% organically, at $4 billion.
Europe, Middle East and Africa segment’s revenues came in at $553.4 million, up 8% year over year on a reported basis and 4% organically, missing our estimate of $603.6 million. Bookings were up 12% year over year on a reported basis and 7% organically, at $660.2 million.
Revenues from the Asia Pacific segment were up 11% year over year on a reported basis and 16% on an organic basis, to $327.3 million, beating our estimate of $314 million. Bookings of $396.9 million increased 2% on a reported basis and 6% organically.
Operating Margin Performance
Adjusted operating income came in at $640 million, up 36% year over year. Adjusted operating margin improved 230 basis points to 15.2%.
Key Balance Sheet and Cash Flow Figures
Trane ended the quarter with a cash balance of $850 million compared with $1.1 billion in the previous quarter. The debt balance was $4.9 billion compared with $4.8 billion in the previous quarter. It generated $254 million of cash from operating activities and free cash of $175 million in the quarter.
2024 Guidance
The company raised its 2024 guidance. It currently expects revenues to increase 8% to 9% on a reported as well as organic basis. The previous expectation was 7% to 8% growth on a reported basis and 6% to 7% growth on an organic basis.
Adjusted EPS is expected to be between $10.30 and $10.40 up from $10 to $10.3 expected previously.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Trane Technologies has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Trane Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Trane Technologies belongs to the Zacks Technology Services industry. Another stock from the same industry, Seagate (STX), has gained 9.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Seagate reported revenues of $1.66 billion in the last reported quarter, representing a year-over-year change of -11%. EPS of $0.33 for the same period compares with -$0.28 a year ago.
Seagate is expected to post earnings of $0.69 per share for the current quarter, representing a year-over-year change of +483.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +15.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Seagate. Also, the stock has a VGM Score of B.
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