Analyst Note| Brian Bernard, CFA, CPA |
In early October, Allegion warned investors that supply chain disruptions and inflation would cause the firm's full-year financial results to fall short of management's previous guidance. Allegion's third-quarter performance reflected this tougher operating environment; compared with the prior-year quarter, reported revenue declined nearly 2% and adjusted operating margin retreated 330 basis points to 20%. But the firm is on track to achieve its downward-revised 2021 guidance for reported revenue growth (4%-4.5%), adjusted earnings ($5.00-$5.10), and free cash flow ($460-$480 million). It's worth noting that Allegion is still poised to have a record free cash flow year.