Lennox International Inc (LII, Financial) released its earnings report on October 26, 2023, announcing record third-quarter revenue of $1.37 billion. The company's operating income was $187 million for the third quarter, including a $63M non-cash impairment related to the planned European divestiture. The operating margin was 13.7%, and GAAP diluted earnings per share were $3.65. Core revenue, excluding European Operations, grew 10% to $1.30 billion.
Financial Highlights
Lennox's Q3 revenue was $1.37 billion, with core revenue, excluding European operations, being $1.30 billion, up 10%. The revenue growth was driven by price and favorable mix, partially offset by lower sales volumes. The operating income was $187 million with an operating profit margin of 13.7%. Adjusted segment profit was $251 million, up 33%, and adjusted segment profit margin was 19.3%, up 334 basis points.
The net income was $130.4 million, or $3.65 per share, compared to $141.9 million, or $3.99 per share, in the prior year quarter. Adjusted net income was $191.6 million, or $5.37 per share, compared to $146.8 million, or $4.13 per share, in the prior year quarter. Operating cash flow was $313 million compared to $171 million in the prior-year quarter.
Segment Performance
In the third quarter, Lennox's Residential segment maintained a positive mix with increased sales of higher-efficiency products, leading to a 7% sales growth and an 18% rise in operating profits. The Commercial segment continues to achieve remarkable profit growth through pricing and higher efficiency product mix.
Full-Year 2023 Guidance
For the full year of 2023, Lennox now expects core revenue to be up approximately 5% and adjusted earnings per share of $17.25 to $17.75. Based on exceptional year-to-date performance and end market outlook, the company is updating its free cash flow outlook to include operating cash flow of $600 million to $650 million and capital expenditures of approximately $250 million.
Lennox International Inc (LII, Financial) is a leader in energy-efficient climate-control solutions. The company's record results for the third quarter of 2023 are a testament to its consistent leadership performance, the dedication and teamwork of its employees, and the focus on its transformational self-help initiatives.
Explore the complete 8-K earnings release (here) from Lennox International Inc for further details.
