Lennox shares rise after beating Wall Street estimates on profit

[Air conditioning on top of a building]
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Shares of Lennox International Inc. (NYSE: NYSE:LII [https://seekingalpha.com/symbol/LII]) rose 1.1% in premarket trading Wednesday after the maker of heating, ventilation, air conditioning and refrigeration systems beat Wall Street’s third-quarter earnings and estimates and tightened its full-year guidance.

Lennox reported adjusted earnings of $6.98 a share, topping analyst forecasts of $6.84 a share, and revenue of $1.40 billion, missing expectations of $1.48 billion.

Net income rose to $246 million, or $6.98 a share, from $239 million, or $6.68 a share, in the same quarter a year earlier. (Wall Street had expected GAAP earnings of $6.79 a share.)

“2025 is proving to be a transitional year, shaped by the impact of the refrigerant transition and difficult macroeconomic conditions,” Chief Executive Alok Maskara said in a statement. “During these uncertain times, the Lennox team continues to respond with agility and discipline, delivering margin expansion in both segments.”

Maskara added that recent acquisitions, including DuroDyne and Supco, would enhance Lennox’s (LII [https://seekingalpha.com/symbol/LII]) parts and accessories portfolio and position the company for stronger performance in 2026.

SEGMENT HIGHLIGHTS

The home comfort Solutions segment, which serves residential markets, saw revenue fall 12% to $913 million, as elevated channel destocking and weak summer demand weighed on sales. Despite those challenges, segment profit margins expanded 30 basis points to 22.2%, supported by pricing and cost-reduction efforts.

The building climate Solutions segment, which includes commercial systems and services, delivered 10% revenue growth to $514 million and a 27% increase in segment profit to $134 million. Segment margin widened 330 basis points to 26.1%, aided by favorable mix, pricing, and productivity improvements.

FINANCIALS AND CASH FLOW

Companywide, operating income increased 2% to $310 million, with an operating margin of 21.7%, up 150 basis points from a year earlier. Operating cash flow totaled $301 million, down from $452 million last year, as inventories remained temporarily elevated. Lennox repurchased $37 million in shares during the quarter and reported net capital expenditures of $35 million.

OUTLOOK

Lennox (LII [https://seekingalpha.com/symbol/LII]) updated its full-year 2025 guidance, now expecting revenue to decline about 1% and adjusted earnings between $22.75 and $23.25 a share, versus the consensus estimate of $23.30 a share. The company continues to project free cash flow of roughly $550 million, with pricing expected to offset inflationary pressures.

Maskara said the company remains focused on execution and long-term growth. “Our team’s continued discipline and operational excellence will allow us to emerge stronger as the market normalizes in 2026 and beyond.”

As of early Wednesday, Lennox shares were up 1.1% in premarket trading. Before Wednesday, the shares had fallen 9.9% year-to-date, contrasting with a 15% gain for the Standard & Poor’s 500 stock index (SP500 [https://seekingalpha.com/symbol/SP500]).

MORE ON LENNOX

* Lennox International Is Getting Close To A Downgrade [https://seekingalpha.com/article/4828105-lennox-international-is-getting-close-to-a-downgrade]
* Lennox: Attractive Valuations And Impending Recovery In 2026 Make It A Good Buy [https://seekingalpha.com/article/4827870-lennox-attractive-valuations-impending-recovery-in-2026-good-buy]
* Lennox International Inc. (LII) Presents At Morgan Stanley's 13th Annual Laguna Conference (Transcript) [https://seekingalpha.com/article/4822302-lennox-international-inc-lii-presents-at-morgan-stanleys-13th-annual-laguna-conference]
* Lennox reports mixed Q3 results; updates FY25 outlook [https://seekingalpha.com/news/4506541-lennox-reports-mixed-q3-results-updates-fy25-outlook]
* Lennox Q3 2025 Earnings Preview [https://seekingalpha.com/news/4506260-lennox-q3-2025-earnings-preview]