Wednesday, Lennox International, Inc. (LII), a provider of indoor climate control solutions, reported a loss for the first-quarter, reflecting the impact of lower sales volume across all business segments in its "seasonally lightest quarter". In addition, the company lowered its guidance for the full year 2009, citing the prevailing global economic slump. Lennox International also expects a 12% salaried headcount reduction in 2009.
The Richardson, Texas-based company's net loss was $18.1 million, or $0.33 per share, compared with a net income of $6.3 million, or $0.10 per share, in the year-ago quarter.
On average, four analysts polled by Thomson Reuters expected the company to report a loss of $0.02 per share for the quarter. Analysts' estimates typically exclude special items.
Loss from continuing operations was $18.2 million, or $0.33 per share, compared to an income from continuing operations of $6.7 million, or $0.11 per share. On an adjusted basis, loss from continuing operations was $12.4 million, or $0.23 per share, compared to a net income from continuing operations of $6.7 million, or $0.11 per share, in the year-ago quarter.
Adjusted loss from continuing operations excluded a charge of $7.5 million from restructuring activities as well as a $1.7 million gain from the net change in unrealized gains on open futures contracts. Quarterly revenue dropped 23% to $585.4 million from $764.5 million in the prior year. Analysts expected the company to report revenues of $638.00 million for the quarter. Excluding foreign exchange impact, revenue would have declined 18%.
On a segmental basis, revenue from Residential Heating & Cooling business decrease 25% to $246.3 million from $329.2 million in the comparable quarter a year ago. Excluding foreign exchange impact, revenue was down 23%.
Commercial Heating & Cooling business revenue for the quarter fell 20% to $131.5 million from $165.2 million in the prior year; with a 16% decline in revenue, excluding foreign exchange movements.
Including forex fluctuations, revenue in the Service Experts business was $109.2 million for the first quarter, down 21% from $137.5 million in the year-ago quarter. Revenue fell 17% excluding the foreign exchange volatility.
Revenue in the Refrigeration business for the quarter dropped 27% to $113.7 million from $154.8 million a year ago. Revenue was down 14% sans foreign exchange impact.
Providing outlook, Chief Executive Officer Todd Bluedorn said, "We are entering stronger seasonal periods, although we expect end markets conditions to remain difficult in 2009 and are re-setting our revenue and earnings guidance accordingly."
Looking forward, the company sees full-year 2009 earnings per share from continuing operations in a range of $1.38 to $1.78, down from the previous guidance range of $1.91 to $2.31. Adjusted EPS from continuing operations are expected to be in a range of $1.65 to $2.05, down from the earlier $2.10 to $2.50.
Lennox International further reduced revenue guidance for full year 2009 to a range of 15% to 19% decline from 8% to 12% decline projected earlier.
Currently, analysts expect the company to report earnings of $2.06 per share on revenue of $3.05 billion for the full year.
The company also lowered its capital spending guidance for 2009 to approximately $75 million from the prior guidance of $80 million.
Lennox International announced that it is executing additional operational efficiency and cost reduction initiatives, including a $55 million cut in selling, general and administrative expenses as well as a further salaried headcount reduction.
LII is currently trading at $29.84, up 3.32%, on the NYSE.
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