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Trane Technologies raised its full-year revenue outlook Thursday after quarterly sales rose 18% and its order backlog climbed 73% to $12.5 billion.
The heating, cooling and refrigeration company reported third-quarter revenue of $6.76 billion, compared with $5.74 billion a year earlier. Organic revenue, which removes effects such as currency movements and acquisitions, increased 16%.
Reported earnings per share from continuing operations rose 25% to $4.79. Adjusted continuing earnings per share also increased 25%, to $4.86.
Orders outpace sales
Bookings reached $7.25 billion, up 21% on a reported basis and 20% organically. The company’s book-to-bill ratio was 107%, meaning new orders exceeded revenue during the quarter.
Backlog in the Americas commercial heating, ventilation and air-conditioning business increased approximately 80%. Trane said bookings growth was broad-based across its segments.
Americas revenue rose 21% to $5.65 billion, with organic growth of 19%. Europe, Middle East and Africa revenue increased approximately 1%, while Asia Pacific revenue rose 8%.
Revenue forecast rises, earnings outlook holds
Trane now expects full-year reported revenue growth of approximately 13.5% and organic growth of approximately 11%.
The company reaffirmed its adjusted continuing earnings forecast of $15.20 to $15.30 a share. Its GAAP continuing earnings forecast is approximately $15 to $15.10 a share.
Strong growth did not lift every margin measure. Consolidated adjusted operating margin narrowed to 20.2% from 20.6%, while GAAP operating margin fell to 19.9% from 20.3%.
Chief executive Dave Regnery said the company continued to face supply-chain and inflation pressures even as demand for energy efficiency supported orders.
Free cash flow through September reached approximately $2.8 billion, up about 60%. Through October, Trane had deployed or committed approximately $3.4 billion of capital, including about $1.4 billion for share repurchases and $1.08 billion for acquisitions.
JBizNews Desk | Swords, Ireland
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