Allegion raises 2026 outlook on strong Q3 Americas non-residential growth

Allegion plc raised its full-year 2026 revenue and adjusted earnings per share outlook. The move follows a third quarter where organic revenue grew 7.2% to $1,172.6 million. The Dublin-based security products provider attributed the performance to strength in its Americas non-residential business, which drove volume growth and price realization.

Net earnings hit $220.9 million, or $2.59 per share. That is an 18.8% year-over-year increase. Adjusted net earnings reached $221.0 million, or $2.60 per share, up 13.0% from the prior-year period. Operating margin expanded to 24.3% from 21.8%. The adjusted operating margin rose to 24.7% from 24.1%. Management cited favorable volume leverage and price and productivity net of inflation and investment as primary drivers for the margin improvement.

In the Americas segment, revenues increased 11.7% on a reported basis and 9.1% organically. The non-residential business grew in the low double digits organically, while the residential segment grew in the mid-single digits. The International segment saw revenues rise 1.8% reported but fall 0.2% organically, as volume declines offset favorable pricing. Adjusted operating margin in the International region decreased by 40 basis points to 13.9%.

Third-quarter results included a benefit from IEEPA tariff refunds. These added $19.9 million to operating income and $0.9 million to interest income. The amounts were excluded from adjusted operating income and adjusted EPS calculations. The company's effective tax rate for the quarter was 17.5%, compared with 9.8% in the prior-year period.

Allegion updated its full-year 2026 guidance to expect reported revenue growth between 9.5% and 10.5%, and organic growth between 5.0% and 6.0%. The company now projects full-year adjusted EPS in the range of $9.05 to $9.10, and reported EPS between $8.35 and $8.40. These projections assume an average diluted share count of approximately 85.6 million shares and an adjusted effective tax rate of 18% to 19%. The outlook also assumes full-year available cash flow will be between 85% and 95% of adjusted net income.

During the third quarter, Allegion repurchased approximately 0.8 million shares for about $120 million and paid quarterly dividends of $0.55 per share, totaling roughly $46 million. The company ended the quarter with $388.1 million in cash and cash equivalents against total debt of $2,032.0 million.