Trane Technologies PLC (NYSE:TT) reported Q2 2023 revenue growth of 12% Y/Y on a reported and 11% Y/Y on an organic basis to $4.71 billion, beating the consensus of $4.62 billion.
The company witnessed strong volume growth, positive price realization, and improved productivity in the quarter.
Bookings declined by 3% Y/Y (-5% Y/Y organically) to $4.50 billion.
Adjusted continuing EPS of $2.68 (+24% Y/Y), beating the consensus of $2.55.
Adjusted operating margin expanded by 110 bps to 18.0%, and the adjusted EBITDA margin expanded by 100 bps to 19.7%.
Americas segment net revenue was $3.69 billion (+9% Y/Y), Bookings of $3.42 billion (-8% Y/Y), Adjusted operating margin 19.8% (up 100 bps Y/Y), and Adjusted EBITDA margin 21.4% (up 70 bps Y/Y).
EMEA net revenues $617.6 million (+18% Y/Y); Bookings $610.0 million (+24% Y/Y), Adjusted operating margin 17.5% (up 100 bps Y/Y) and Adjusted EBITDA margin 19.1% (up 140 bps).
Asia Pacific net revenue $394.6 million (+40% Y/Y), Bookings $461.9 million (+6% Y/Y); and adjusted operating margin 21.0% (up 670 bps Y/Y), and adjusted EBITDA margin 21.9% (up 660 bps Y/Y).
The company exited Q2 2023 with a backlog of $7 billion.
Operating cash flow of $532.5 million as of June 30, 2023, compared to $233.5 million a year ago. Free cash flow stood at $427 million.
The company held $663.6 million in cash and equivalents as of June 30, 2023.
Year-to-date, the company returned $341 million in dividends and $300 million in share repurchases to shareholders.
2023 Outlook: Trane Technologies raised adjusted EPS outlook to $8.80-$8.90 vs. prior guidance of $8.30-$8.50 vs. consensus of $8.48.
The company revised 2023 reported revenue growth to about 10% (from 9%-10% earlier) and organic revenue growth to 8% (from 7%-8% previously).
Price Action: TT shares are trading higher by 3.28% at $205.55 on the last check Wednesday.
