Trane Technologies Earnings: Commercial HVAC Continues to Shine; Management Sees Strong 2024

Trane Technologies’ stock surged over 7% on Feb. 1 as the market digested the narrow-moat firm’s strong fourth-quarter performance and 2024 guidance. Fourth-quarter organic sales increased 6% year over year to $4.4 billion, adjusted operating margin expanded 190 basis points to 15.6%, and adjusted earnings per share grew a robust 19% to $2.17. The excellent fourth-quarter results came despite normalizing demand for Trane's residential HVAC systems and transportation refrigeration products in the Americas. That’s because global commercial HVAC demand (approximately 65% of sales) remains very robust. Indeed, commercial HVAC revenue in the Americas was up at least 25% and grew by a high-single-digit percentage in the Europe, Middle East, and Africa region. Asia-Pacific commercial HVAC sales were flat year on year, but that was a good showing considering the slowing Chinese economy.