(RTTNews) - Climate control solutions provider Lennox International Inc. (LII: News ) Wednesday reported a sharp decline in profit for the third quarter, as sales dropped 22% year-on-year reflecting lower volume across all business segments. The company also lowered its full year earnings from continuing operations guidance and tightened the adjusted earnings outlook.

Net income for the quarter plunged to $31.0 million or $0.54 per share from $54.9 million or $0.96 per share in the year-ago quarter.

Income from continuing operations was $33.7 million or $0.59 per share, down from $54.8 million or $0.96 per share in the prior-year quarter.

For the quarter, Lennox recorded loss from discontinued operations of $2.7 million or $0.05 per share, as a result of plans to exit the business of five unprofitable Service Experts centers.

On an adjusted basis, income from continuing operations was $41.1 million or $0.72 per share, lower than $62.7 million or $1.10 per share in the prior year. Adjusted results excluded an $8.2 million after-tax charge from restructuring activities and a $0.8 million after-tax gain from the net change in unrealized gains on open futures contracts and other items, net.

On an average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.71 per share. Analysts' estimates typically exclude special items.

Quarterly net sales declined 22% to $749.5 million from $959.9 million in the previous year. Excluding the negative impact of foreign exchange, revenue would have been down 20%. Three analysts had consensus revenue estimate of $781.07 million for the quarter.
Segment-wise, net sales from Residential Heating & Cooling declined to $347.1 million from $414.0 million a year ago, impacted negatively by lower volume and mix, with offsets from lower component and commodity costs and SG&A salaried headcount savings.

Commercial Heating & Cooling segment's revenue plunged to $154.4 million from $251.4 million a year ago. Service Experts net sales were $137.3 million, lower than $154.0 million last year. Refrigeration division net sales decreased to $133.6 million from $162.9 million a year earlier.

Gross margin for the quarter was 29.8% compared to 28.1% in the year-ago quarter, up 170 basis points, benefited primarily from lower component and commodity costs as well as savings from manufacturing rationalization.

Commenting on the results, Todd Bluedorn, chief executive officer, said, "As expected, end market conditions continued to be difficult in the third quarter, and commercial markets were down significantly. While residential and refrigeration markets were also down from a year ago, we saw the rate of decline slow in the third quarter."

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