Trane Technologies Beats Q2 Expectations, Raises 2024 Guidance Amid Solid Bookings

Trane Technologies plc TT shares are trading higher after the company reported better-than-expected second-quarter financial results and raised its FY24 guidance.

Revenues grew 13% Y/Y to $5.31 billion, surpassing the consensus of $5.13 billion. Bookings increased 19% Y/Y to $5.34 billion in the quarter.

Enterprise reported a 13% Y/Y increase in both revenues and organic revenues. Acquisitions contributed about 1 percentage point, which was offset by a 1 percentage point negative foreign exchange impact.

The backlog totaled $7.5 billion, including about $2.8 billion in Commercial HVAC projects for 2025 and beyond, with $1 billion added in the second quarter.

Adjusted EBITDA rose 21% Y/Y to $1.119 billion, with margin expansion of 140 bps Y/Y to 21.1%. Adjusted EPS of $3.30 surpassed the street view of $3.08.

For the six months that ended in June, cash flow from continuing operating activities was $959 million, and free cash flow was $810 million. As of June 30, cash and equivalents stood at $1.33 billion.

Year-to-date through July, the company deployed or committed around $1.2 billion in capital, including $379 million for dividends and $731 million for share repurchases.

Trane Technologies plans to maintain a competitive and growing dividend while deploying 100% of excess cash to shareholders over time.

Outlook: Trane Technologies raised FY24 organic revenue growth outlook to 10% (prior view 8% to 9%) and adjusted the EPS outlook to $10.80 (vs. consensus of $10.53) from $10.40 – $10.50.

Dave Regnery, chair and CEO said, “Given our strong first half performance and positive outlook, we are raising our full-year revenue and adjusted EPS guidance well above the high end of our prior range. With our purpose-driven strategy, proven business operating system and uplifting culture, we are well positioned to continue delivering leading growth among industrials and differentiated shareholder returns over the long term.”

Investors can gain exposure to the stock via Invesco Building & Construction ETF PKB and AdvisorShares Gerber Kawasaki ETF GK.

Price Action: TT shares are up 1.80% at $334.76 at the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.