Trane Technologies Earnings: 2023 Guidance Raised After Another Strong Quarter

Shares of Trane Technologies rallied over 10% during intraday trading Nov. 1 after the narrow-moat-rated HVAC and refrigeration products manufacturer reported another strong quarterly performance. Reported revenue increased nearly 12% year over year (9% organic) to $4.9 billion, and adjusted operating margin expanded 130 basis points to 18% in the third quarter. Adjusted operating margin met our expectations, but reported revenue growth outpaced our forecast by 200 basis points. Strong demand for commercial HVAC products continues to be the primary driver behind Trane’s robust sales growth this year, more than offsetting normalizing North American residential HVAC and transportation refrigeration demand. Commercial HVAC sales remain particularly robust across the education, healthcare, and data center verticals.