Lennox Q4 Earnings Smashes Estimates; Reiterates FY22 Revenue Growth Forecast

  • Lennox International Inc LII reported fourth-quarter FY21 sales growth of 5.6% year-on-year, to $964.8 million, beating the analyst consensus of $957.47 million.
  • Revenue in the Residential Heating & Cooling business segment increased 12% Y/Y to $620 million, Commercial Heating & Cooling business declined 11% to $201 million, and Refrigeration business jumped 6% to $143 million.
  • Adjusted EPS of $2.35 beat the analyst consensus of $1.99.
  • Gross profit fell 7.6% Y/Y to $254 million, and the margin contracted 380 basis points Y/Y to 26.3%.
  • Selling, general and administrative expenses rose 5.7% Y/Y to $151.5 million.
  • The operating margin for the quarter contracted 510 basis points to 10.1%.
  • Total segment profit fell 26.8% to $101.9 million, and the segment margin declined 460 basis points to 10.6%.
  • The company held $36.5 million in cash and equivalents as of December 31, 2021. Cash provided by operating activities for twelve months totaled $515.5 million.
  • The company noted COVID-19 and global supply chain disruptions continued to impact its operations in the fourth quarter.
  • Outlook: Lennox sees FY22 adjusted EPS of $13.50 - $14.50 (prior view $13.40 - $14.40), versus the consensus of $14.01.
  • The company affirmed its revenue growth guidance of 5% -10%. The company also reiterated its plans for $400 million of stock repurchases for the year.
  • Price Action: LII shares traded lower by 0.22% at $282.99 on the last check Tuesday.
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