Lennox Reports Third Quarter Results

Core Insights - Lennox reported a revenue of $1.4 billion for Q3 2025, a decline of 5% year-over-year, while operating income increased by 2% to $310 million, resulting in a GAAP diluted earnings per share of $6.98, up 4% from the previous year [1][2][7]. Financial Performance - Revenue decreased by 5% to $1.4 billion, primarily due to unfavorable sales volumes [2][5]. - Operating income rose by 2% to $310 million, with an operating profit margin of 21.7%, an increase of 150 basis points [5][6]. - Net income was $246 million, or $6.98 per share, compared to $239 million, or $6.68 per share, in the prior-year quarter [7][10]. Segment Analysis - Home Comfort Solutions segment revenue fell by 12% to $913 million, with segment profit decreasing by 10% to $203 million, despite a margin increase of 30 basis points to 22.2% [9][10]. - Building Climate Solutions segment achieved a 10% revenue growth to $514 million, with segment profit increasing by 27% to $134 million, and margin improvement of 330 basis points to 26.1% [10][11]. Guidance and Outlook - The company updated its full-year guidance, expecting a revenue decline of approximately 1% and adjusted earnings per share in the range of $22.75 to $23.25 [3][11]. - The CEO highlighted that 2025 is a transitional year influenced by refrigerant transitions and macroeconomic challenges, but the company is positioned for success in 2026 and beyond [3][4]. Cash Flow and Capital Expenditures - Operating cash flow was $301 million, down from $452 million in the prior-year quarter, attributed to elevated finished goods inventory levels [8][10]. - Net capital expenditures were $35 million, compared to $40 million in the prior-year quarter, with $37 million of shares repurchased during the quarter [8][10].