https://assets.capyfin.com/instruments/678fdc13234e27009c5d5b73.png avatar
Lennox
🇺🇸 NYSE:LII
View Company
OverviewEarningsDividends
•
Mar 31, 2020

Lennox Q1 2020 Earnings Report

Lennox International reported first quarter results, impacted by adverse weather and the COVID-19 pandemic, and updated financial outlook for the year based on current market assumptions.

Key Takeaways

Lennox International's first-quarter GAAP revenue was $724 million, down 8%. GAAP EPS from continuing operations was $0.32, compared to $1.73 in the prior-year quarter. Adjusted EPS from continuing operations was $0.56 compared to $1.68 in the prior-year quarter.

First-quarter revenue on a GAAP basis was down 8%; excluding the impact from prior-year divestitures, adjusted revenue was down 4%.

GAAP EPS from continuing operations was $0.32 compared to $1.73 in the prior-year quarter, which included $0.87 of insurance benefit related to the tornado.

Adjusted EPS from continuing operations was $0.56 compared to $1.68 in the prior-year quarter, which included $0.75 of insurance benefit related to the tornado.

The company repurchased $100 million of stock in the first quarter.

Total Revenue
$724M
Previous year: $790M
-8.4%
EPS
$0.56
Previous year: $1.68
-66.7%
Home Comfort Margin
7.4%
Building Climate Margin
10.5%
Gross Profit
$166M
Previous year: $202M
-17.8%
Cash and Equivalents
$39.1M
Previous year: $31.7M
+23.3%
Free Cash Flow
-$123M
Previous year: -$178M
-31.0%
Total Assets
$2.13B
Previous year: $2.11B
+1.1%

Lennox

Lennox

Lennox Revenue by Segment

Forward Guidance

For 2020, the company currently assumes a negative 20% impact from COVID-19 on the North America unitary HVAC and refrigeration market. 2020 adjusted revenue is expected to be down 11-17% from the prior year versus previous guidance for 4-8% growth. The company is currently estimating 2020 GAAP EPS from continuing operations of $7.07-$8.07 and adjusted EPS from continuing operations of $7.50-$8.50.

Positive Outlook

  • Lennox has a focused and seasoned team with experience managing through economic downturns.
  • The company has already taken cost reduction actions to realize $115 million in SG&A savings for the balance of the year.
  • Cash generation this year is expected to remain strong as working capital requirements shrink.
  • The company is taking action to reduce capital expenditures.
  • The company expects to strengthen its position in the market as it emerges in the recovery.

Challenges Ahead

  • Significant challenges lie ahead in uncertain market conditions.
  • The company expects a negative 20% impact from the pandemic.
  • Company revenue is expected to be down 11-17%.
  • GAAP EPS from continuing operations is expected to be $7.07-$8.07.
  • Adjusted EPS from continuing operations is expected to be in the range of $7.50-$8.50 for 2020.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

View Lennox