Trane Technologies Delivers Strong Q3: Revenue And EPS Outpace Expectations Amid Rising Demand

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

Revenues grew 11% year-over-year to $5.44 billion, surpassing the consensus of $5.32 billion. Bookings increased 5% to $5.213 billion in the quarter.

Enterprise reported an 11% increase in both revenues and organic revenues. The backlog totaled $7.2 billion, versus $6.9 billion at year-end 2023.

Adjusted EBITDA rose 18% to $1.127 billion, with margin expansion of 120 bps Y/Y to 20.7%. Adjusted EPS of $3.37 surpassed the street view of $3.24.

As of September 30, 2024, operating cash flow from continuing operating activities reached $2.3 billion, while free cash flow amounted to $2 billion. As of September 30, cash and equivalents stood at $1.93 billion.

Year-to-date through October, the company deployed or committed around $2.0 billion in capital, including $800 million for dividends and $1 billion 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 11% (prior view 10%) and adjusted the EPS outlook to $11.10 (from $10.80) vs. consensus of $10.90.

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

Price Action: TT shares are down 4.58% at $372.72 at the last check Wednesday.

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