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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.
Lennox
Lennox
Lennox Revenue by Segment
Revenue by Segment
Home Comfort Solutions Revenue
CapyFin.comBuilding Climate Solutions Revenue
CapyFin.com 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