Lennox International (NYSE:LII) Posts Earnings Results, Misses Expectations By $0.45 EPS

Lennox International (NYSE:LII) announced its quarterly earnings results on Wednesday. The construction company reported $6.84 earnings per share for the quarter, missing the consensus estimate of $7.29 by ($0.45), Zacks reports. The business had revenue of $1.57 billion during the quarter, compared to the consensus estimate of $1.57 billion. Lennox International had a net margin of 13.77% and a return on equity of 62.34%. Lennox International’s revenue was up 10.2% compared to the same quarter last year. During the same period in the previous year, the business posted $6.98 EPS.

Here are the key takeaways from Lennox International’s conference call:

• Third-quarter profitability declined despite strong revenue growth: revenue rose 10.2% to $1.6 billion, but total segment profit fell about 2% and adjusted EPS declined 7% to $6.84, as competitive pricing pressure and tariffs outpaced price realization.
• Lennox reduced its full-year outlook, now expecting approximately 6% revenue growth, adjusted EPS of $21.00–$21.50, and free cash flow of $700–$750 million. Home Comfort Solutions revenue is now expected to decline about 4%, while its full-year margin is projected to contract roughly 350 basis points.
• Building Climate Solutions remained a major growth driver, with revenue up 24% including 15% organic growth, supported by commercial equipment, services, emergency replacement demand, national accounts, and acquisitions; full-year segment growth is now expected to be approximately 23%.
• Management launched a recovery plan centered on more targeted pricing, cost and productivity actions, entry-tier product expansion, and deeper national-account relationships. The company expects these actions to support higher sales, EBIT, and EPS in 2027 without relying on a significant recovery in industry volumes, although the first half is expected to face continued tariff and inflation pressure.
• Cash generation and inventory management improved, with third-quarter operating cash flow of $395 million, trailing-12-month free-cash-flow conversion of 108%, and organic inventory units down more than 15%; Lennox also repurchased approximately $151 million of shares during the quarter.

Lennox International Stock Up 0.8%

NYSE LII traded up $2.92 during mid-day trading on Friday, reaching $351.04. The stock had a trading volume of 82,168 shares, compared to its average volume of 498,734. Lennox International has a 1 year low of $322.00 and a 1 year high of $587.27. The company has a fifty day moving average price of $369.57 and a 200 day moving average price of $473.02. The company has a debt-to-equity ratio of 0.64, a current ratio of 1.21 and a quick ratio of 0.77. The stock has a market cap of $12.13 billion, a PE ratio of 16.28, a price-to-earnings-growth ratio of 1.53 and a beta of 1.16.

Lennox International Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Thursday, October 15th. Investors of record on Wednesday, September 30th were given a dividend of $1.36 per share. This represents a $5.44 annualized dividend and a yield of 1.5%. The ex-dividend date of this dividend was Wednesday, September 30th. Lennox International’s dividend payout ratio is 25.24%.

Analysts Set New Price Targets

LII has been the topic of a number of recent analyst reports. Royal Bank Of Canada dropped their price target on shares of Lennox International from $406.00 to $378.00 and set a “sector perform” rating on the stock in a research report on Thursday. William Blair reissued an “outperform” rating on shares of Lennox International in a report on Wednesday, July 29th. Mizuho set a $350.00 target price on Lennox International in a research note on Thursday. The Goldman Sachs Group lowered Lennox International from a “buy” rating to a “neutral” rating and decreased their price objective for the stock from $547.00 to $390.00 in a report on Wednesday, October 14th. Finally, Stephens downgraded shares of Lennox International from an “overweight” rating to an “equal weight” rating and set a $350.00 price objective for the company. in a report on Thursday. Three equities research analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Hold” and an average price target of $459.08.

Key Stories Impacting Lennox International

Here are the key news stories impacting Lennox International this week:

• Positive Sentiment: Third-quarter revenue increased 10.2% year over year to approximately $1.57 billion, in line with analyst expectations. The Building Climate Solutions segment delivered particularly strong growth, with revenue up 24%. Lennox: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Lennox has added smart thermostat energy-saving services, which could support recurring revenue and strengthen its connected-home product offering. Lennox International Adds Smart Thermostat Energy Saving Services
• Neutral Sentiment: Some analysts view the selloff as potentially creating value after the stock’s sharp decline, with one analysis suggesting the shares could be undervalued if margin pressures ease. However, the recovery depends on improved operating performance. Lennox Stock May Be 44% Undervalued After Margin Pressure
• Negative Sentiment: Adjusted third-quarter EPS was $6.84, missing the $7.29 consensus estimate and declining from $6.98 a year earlier. Management lowered full-year adjusted EPS guidance to $21.00-$21.50 from $23.00-$24.00.
• Negative Sentiment: Inflation, tariff-related expenses, competitive pricing pressure and lower factory absorption compressed margins. In Home Comfort Solutions, revenue growth was modest while profitability declined as Lennox used pricing actions to defend and regain market share. Lennox Falls After Q3 Profit Miss and Lowered Outlook
• Negative Sentiment: Analysts responded with multiple downgrades and price-target cuts: Oppenheimer moved to Perform, Stephens to Equal Weight, Wells Fargo reduced its target to $355, and RBC cut its target to $378. These actions signal limited near-term upside and reduced confidence in a quick recovery. Lennox Downgraded at Oppenheimer

About Lennox International

Lennox International Inc is a heating, ventilation, air conditioning and refrigeration company headquartered in Richardson, Texas. Founded in 1895 by Dave Lennox, the company develops and markets products designed to provide climate control and improve indoor air quality in residential and commercial buildings.

Its product portfolio includes air conditioners, heat pumps, furnaces, air handlers, thermostats, indoor air-quality equipment and related controls. Lennox also provides commercial heating and cooling systems, replacement components, installation support and other services through distributors, dealers and contractors.

Lennox primarily serves customers in the United States and Canada, with products and services also marketed in selected international markets.