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Lennox Q3 revenue misses on competitive pressure, inflation

By Reuters News


Overview

  • U.S. HVAC solutions provider's Q3 revenue rose 10% yr/yr, a slight miss versus analyst expectations

  • Adjusted EPS for Q3 fell 7% and missed analyst expectations

  • Profitability pressured by competitive environment and inflation-driven cost increases


Outlook

  • Lennox sees 2026 revenue growth of about 6%, including 5% from acquisitions

  • Company lowers 2026 adjusted EPS guidance to $21.00-$21.50 from $23.00-$24.00

  • Lennox expects 2026 free cash flow of $700 mln to $750 mln


Result Drivers

  • COMPETITIVE PRESSURE - Co said heightened competition weighed on margins and results, per CEO Alok Maskara

  • INFLATION AND COSTS - Product cost inflation, tariffs, higher fuel and distribution costs reduced profitability

  • PRICE ADJUSTMENTS - Co implemented targeted price adjustments in select segments to defend and recapture share


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Slight Miss*

$1.57 bln

$1.58 bln (14 Analysts)

Q3 Adjusted EPS

Miss

$6.84

$7.36 (16 Analysts)

Q3 EPS

$6.41

*Applies to a deviation of less than 1%; not applicable for per-share numbers.


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 15 "hold" and 2 "sell" or "strong sell"

  • The average consensus recommendation for the electrical components & equipment peer group is "buy."

  • Wall Street's median 12-month price target for Lennox International Inc. is $438.00, about 17.7% above its October 27 closing price of $372.05

  • The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 22 three months ago


Reuters Recommended Reads

  • Oct 27 - Watsco Q3 revenue slightly beats on acquisition boost

  • Oct 28 - Otis Q3 sales slightly beat estimates on service revenue growth

  • Oct 27 - Pentair Q3 sales beat estimates on water solutions growth; reaffirms profit guidance


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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