Trane Technologies plc reported fourth‑quarter 2025 results that surpassed consensus expectations, delivering diluted earnings per share of $2.86 versus an estimate of $2.82 and revenue of $5.145 billion against a $5.08 billion forecast. The company’s earnings grew 10% year‑over‑year while revenue rose 6%, reflecting a mix of strong demand in its core commercial HVAC business and disciplined cost management.
The commercial HVAC segment in the Americas drove the majority of the performance, with a 27% increase in revenue and bookings that climbed to $5.8 billion, up 22% from the prior year. Residential revenue fell in the mid‑teens, a decline that management attributed to a temporary inventory build‑out and a shift toward higher‑margin commercial projects. The company’s pricing power in the commercial space helped offset the residential softness and supported the overall revenue growth.
Adjusted EBITDA margin settled at 17.9%, a slight contraction from the 18.3% margin reported in Q4 2024. The margin compression in the Americas and EMEA was largely driven by integration costs from recent acquisitions and higher raw‑material expenses, while the company’s cost‑control initiatives and pricing strategy in the commercial HVAC segment helped mitigate the impact. Despite the margin dip, the company’s operating income rose to $837 million, reflecting improved operational leverage.
Management reiterated its 2026 outlook, projecting organic revenue growth of 6% to 7% and an adjusted EPS range of $14.65 to $14.85, a significant upgrade from the prior guidance of $13.06 to $13.22. The revised guidance signals confidence in sustained demand for commercial HVAC solutions and the company’s ability to convert that demand into higher profitability, while also reflecting the impact of ongoing integration and supply‑chain adjustments.
CEO Dave Regnery highlighted the company’s “purpose‑driven strategy” and the record $7.8 billion enterprise backlog, noting that “strong pricing power and disciplined execution” underpinned the quarter’s results. CFO Christopher Kuehn added that the company’s proactive inventory normalization in the residential segment helped preserve margins, and that the company remains focused on scaling its services and applied solutions portfolio to drive long‑term margin expansion.
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