Lennox's stock falls after 'adverse' weather led to earnings miss, lowered guidance
Shares of Lennox International Inc. slumped 5.7% in premarket trading Monday, after the heating, ventilation and air conditioning (HVAC) company reported second-quarter earnings that missed expectations and cut its full-year outlook, citing adverse weather conditions. Net income fell to $110.7 million, or $2.80 a share, from $137.6 million, or $3.35 a share, in the year-ago period. Excluding non-recurring items, adjusted earnings per share rose 2% to $3.74, but was below the FactSet consensus of $4.12. Revenue fell 6% to $1.10 billion, missing the FactSet consensus of $1.15 billion. Residential heating and cooling revenue fell 4% to $689 million, missing the FactSet consensus of $733 million, commercial heating and cooling revenue rose 4% to $261 million to beat expectations of $258 million and refrigeration revenue increased 2% to $149 million to top expectations of $148 million. For 2019, Lennox cut its guidance for adjusted EPS to $11.30 to $11.90 from $12.00 to $12.60 and for revenue growth to 2% to 5% from 3% to 7%. "Significantly cooler temperatures and higher precipitation across the United States adversely impacted the HVAC market in the second quarter, and especially in key Central regions where cooling degree days were down over 30% and precipitation was up over 60%," said Chief Executive Todd Bluedorn. The stock has rallied 27.4% year to date, while the Dow Jones Industrial Average has advanced 16.4%.
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