Lennox (NYSE:LII) reported stronger-than-expected second-quarter earnings on Wednesday, supported by healthy revenue growth and notable margin improvements across its business segments.
Adjusted earnings per share reached $7.82 for the quarter, beating Wall Street expectations of $6.86 by nearly a dollar. Despite the beat, the stock traded mostly flat in pre-market hours, inching up just 0.01%.
Revenue totaled $1.5 billion, slightly ahead of the $1.47 billion consensus and marking a 3% increase from the same quarter last year.
The provider of climate control solutions saw robust profitability, with segment profit rising 11% year-over-year to $354 million. Segment margins expanded 170 basis points to 23.6%.
“We delivered revenue growth and margin expansion in both segments by skillfully navigating turbulent external conditions,” said CEO Alok Maskara. “Our team’s agility drove productivity and targeted cost actions to offset inflationary pressures, ensuring our pricing remains aligned with the value we deliver.”
The Home Comfort Solutions segment, which generates about two-thirds of Lennox’s total revenue, posted a 3% rise in sales with a 200 basis point increase in segment margins. The Building Climate Solutions division also posted a solid 5% revenue gain with margin growth.
Reflecting its strong quarterly results, Lennox raised its full-year guidance. The company now anticipates around 3% revenue growth and adjusted earnings per share in the range of $23.25 to $24.25 — above the consensus forecast of $22.86.
Operating cash flow came in at $87 million, down from $184 million a year earlier, while share repurchases totaled $210 million for the quarter.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.