Trane Technologies reported strong demand in Q4 with record backlog of $7.8 billion, driven by Americas Commercial HVAC and Applied Solutions. 2026 guidance includes 6%-7% organic revenue growth and adjusted EPS of $14.65-$14.85. Capital deployment in 2025 was $3.2 billion, with $2.8-$3.3 billion planned for 2026.

Executives highlighted robust bookings and outlook for 2026 during the earnings call. Commercial HVAC saw record organic bookings, up over 35% in the Americas. EMEA HVAC also showed strong growth. Residential performance was mixed, with Americas bookings up mid-single digits but revenues down mid-teens.

Margins were impacted by residential inventory actions, reducing factory production by one-third. Transport refrigeration faced pressure but outperformed weak markets. Asia Pacific results varied, with China declining while the rest of Asia showed growth. 2026 guidance includes 6%-7% organic revenue growth and adjusted EPS of $14.65-$14.85.

Commercial HVAC conversion is expected to unfold steadily throughout 2026, with first-quarter growth around 7%-8%. The company aims for organic leverage of 25% or higher and free cash flow conversion of 100% or greater. The balanced capital allocation strategy prioritizes reinvestment and maintaining a strong balance sheet.

Trane Technologies acquired Stellar Energy in 2025, a data center cooling solutions provider. The company expects the acquisition to be modestly EPS accretive in 2026. Data centers remain a focus, with strong demand. The company continues to work with hyperscalers and chipmakers on data center solutions.

On pricing, the company noted residential dynamics were due to lower volume. Tariffs and commodities impact costs, with a focus on mitigation strategies. Roughly half of copper and aluminum needs for 2026 are hedged. Steel pricing is locked for six months. Trane Technologies remains dynamic in response to market conditions.

Read more at Yahoo Finance: Trane Technologies Q4 Earnings Call Highlights