Trane Technologies Clocks 28% Bookings Growth In Q4; Beats Consensus

Trane Technologies PLC TT reported fourth-quarter revenue growth of 12% year-over-year to $3.57 billion and +11% on an organic basis, beating the consensus of $3.55 billion. 

• Bookings increased by 28% Y/Y to $4.06 billion and were up 27% organically.
• Adjusted continuing EPS of $1.36 (+32% Y/Y), beating the consensus of $1.31.
• The adjusted operating margin expanded by 10 bps to 12.5%, and the adjusted EBITDA margin expanded by 30 bps to 14.7%.
• Americas net revenue was $2.75 billion (+15% Y/Y), Bookings of $3.17 billion (+33% Y/Y), Adjusted operating margin 13.6% (down 40 bps), and Adjusted EBITDA margin 15.9% (down 30 bps).
• EMEA net revenues $482.8 million (+4% Y/Y); Bookings $510.3 million (+12% Y/Y), Adjusted operating margin 14% (down 60 bps) and Adjusted EBITDA margin 15.7% (down 50 bps).
• Asia Pacific net revenue $337 million (+3% Y/Y), Bookings $377.1 million (+18% Y/Y); and adjusted operating margin 18% (up 30 bps), and adjusted EBITDA margin 19.2% (up 100 bps). 
• The company entered FY22 with a backlog of $5.4 billion, up 88% Y/Y.
• Trane Technologies generated cash from operating activities for the year of $1.59 billion, compared to $1.44 billion a year ago. Free cash flow was $1.43 billion.
• The company held $2.16 billion in cash and equivalents as of December 31, 2021.
• "With healthy end markets, record customer demand for sustainable solutions, and historic levels of backlog, we are well-positioned to deliver another strong year of financial performance in 2022 and differentiated profitable growth and shareholder returns over the long term," said Dave Regnery, chair and CEO.
• The company recently revealed its intention to increase the annual dividend by 14%, to $2.68 per share annualized, starting in Q1 of 2022.
• FY22 Outlook: Trane Technologies expects GAAP continuing EPS of $6.88 - $7.08 and adjusted EPS of $6.95 - $7.15 vs. consensus of $6.97.
• The company expects challenging 1H and strong 2H with easing inflation and improving the supply chain, and ~20% FY organic leverage.
• Price Action: TT shares closed higher by 1.76% at $172.17 on Friday.