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Sep 30, 2020
Lennox Q3 2020 Earnings Report
Lennox International reported record third quarter revenue and profit, raising 2020 guidance.
Key Takeaways
Lennox International reported a record third-quarter performance, with revenue reaching $1.06 billion, a 2% increase. GAAP EPS from continuing operations rose by 16% to a record $3.42, and adjusted EPS increased by 6% to a record $3.53. The company is raising its full-year guidance for adjusted revenue and EPS.
Record third-quarter revenue of $1.06 billion, up 2%.
GAAP EPS from continuing operations increased 16% to $3.42.
Adjusted EPS from continuing operations increased 6% to $3.53.
Residential revenue rose 13% and set a new record for any quarter at $722 million.
Lennox
Lennox
Lennox Revenue by Segment
Revenue by Segment
Home Comfort Solutions Revenue
CapyFin.comBuilding Climate Solutions Revenue
CapyFin.com Forward Guidance
Lennox International is raising its full-year guidance for revenue and EPS from continuing operations.
Positive Outlook
- Raising guidance for adjusted revenue to be down 5-9% from the prior year compared to previous guidance to be down 10-15%.
- Raising guidance for GAAP EPS from continuing operations to $8.35-$8.95 from previous guidance of $7.31-$8.11.
- Raising guidance for adjusted EPS from continuing operations to $9.05-$9.65 from previous guidance of $7.90-$8.70.
- Capital expenditures are now targeted to be approximately $100 million compared to previous guidance of approximately $120 million.
- Free cash flow is now expected to be approximately $425 million for the full year, up from prior guidance of approximately $340 million.
Challenges Ahead
- We continue to face highly uncertain economic conditions in the fourth quarter and remain cautious on the potential impact from the pandemic heading into the winter season.
- Corporate expense is now expected to be approximately $90 million, primarily due to higher incentive compensation, compared to prior guidance of $75 million.
- The effective tax rate is now expected to be 19-20% on an adjusted basis for the full year compared to prior guidance of 21-22%.
- The company’s remaining 2020 stock repurchase program of $300 million currently remains on hold; the company repurchased $100 million of stock in the first quarter.
- Commercial and Refrigeration continued to be more impacted than Residential from the pandemic
Revenue & Expenses
Visualization of income flow from segment revenue to net income