Lennox International Inc. (LII), a maker of climate control products, on Monday reported a turnaround to profit in the first quarter, reflecting higher revenues across all three of its business segments. Both revenue and adjusted earnings per share beat analysts' estimates.
Looking ahead to fiscal 2013, the company raised the lower end of its adjusted earnings per share guidance range as well as its revenue growth guidance range.
Todd Bluedorn, Chairman and CEO of Lennox International said, "Growth continued across all three of our businesses in the first quarter with strong operational execution driving revenue up 9% and EPS up more than 70%. Our Residential business continued to lead our growth on the strength of new construction and our growth initiatives in the replacement market."
Residential Heating & Cooling business revenue for the quarter increased 15 percent and margin expanded 250 basis points to drive segment profit up 86 percent. In the Commercial Heating & Cooling business, revenue grew 4 percent, led by strong growth in national account services. Refrigeration business rose 3 percent at constant currency on double-digit growth in Asia Pacific and South America.
Richardson, Texas-based Lennox International's first-quarter net income was $8.0 million or $0.16 per share, compared to net loss of $6.1 million or $0.12 per share in the prior-year period.
The financial results have been adjusted for discontinued operations related to the company's previously announced plans to sell its Service Experts business. The transaction was completed on March 22, 2013.
Adjusted earnings per share from continuing operations for the quarter were $0.33, compared to adjusted earnings of $0.19 in the year-ago quarter. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.
Adjusted results for the latest quarter exclude $0.7 million after-tax for the net change in unrealized losses on open future contracts, an after-tax charge of $0.3 million for restructuring activities, and an after-tax charge of $0.2 million for other items.
Revenue for the quarter grew 9 percent to $668.4 million from $614.4 million in the prior-year quarter and beat analysts' consensus revenue estimate of $633.98 million.
Looking ahead to fiscal 2013, Lennox International now forecasts adjusted earnings per share from continuing operations in a range of $3.25 to $3.55, compared to the prior range of $3.15 to $3.55. The company projects revenue growth in a range of 3 to 6 percent, compared to the prior range of 2 to 6 percent, with foreign exchange still expected to have a neutral impact on revenue.
Lennox also narrowed its reported earnings per share from continuing operations guidance to a range of $3.23 to $3.53 from the prior range of $3.15 to $3.55.
Analysts expect the company to earn $3.39 per share for the year on revenues of $3.09 billion.
In addition, the company reiterated its fiscal 2013 capital expenditure guidance of about $60 million and also reiterated its plan to repurchase $100 million of stock during the year.
LII closed Friday's trading at $61.83, up $1.74 on a volume of 469,900 shares.
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