- Lennox International Inc LII reported third-quarter FY21 sales growth of 0.5% year-on-year, to $1.059 billion, missing the analyst consensus of $1.13 billion.
- Revenue in the Residential Heating & Cooling business segment declined 2% Y/Y, Commercial Heating & Cooling increased 2%, and Refrigeration rose 10%.
- Gross profit declined 9% Y/Y to $295 million, and the margin contracted 270 basis points Y/Y to 27.9%.
- The operating margin was 15.4%, and operating income for the quarter declined 2.6% to $162.7 million.
- Adjusted EPS of $3.40 missed the analyst consensus of $3.64.
- Lennox held $44 million in cash and equivalents as of September 30, 2021. Net cash provided by operating activities totaled $222 million with a free cash flow of $199 million.
- "Demand remained strong across all our end markets in the third quarter, but global supply chain and Covid-19 disruptions to production and our labor force materially impacted financial performance," said Chairman and CEO Todd Bluedorn.
- Outlook: Lennox narrowed the FY21 adjusted EPS outlook to $12.10 - $12.30 (prior view $12.10-$12.70) versus the consensus of $12.87.
- It expects revenue growth of 13%-15% (prior view 12%-16%).
- "Looking ahead for the company overall, demand remains strong. But global supply chain bottlenecks and shortages are not expected to be resolved soon, and Covid-19 adds more complexity to labor and production disruptions," Bluedorn added.
- Price Action: LII shares traded lower by 2.94% at $303.06 on the last check Monday.
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