Lennox (LII) Misses Q1 EPS by 55c, Lowers FY20 Guidance

Lennox (NYSE: LII) reported Q1 EPS of $0.56, $0.55 worse than the analyst estimate of $1.11. Revenue for the quarter came in at $724 million versus the consensus estimate of $767.51 million.

GUIDANCE:

Lennox sees FY2020 EPS of $7.50-$8.50, versus the consensus of $9.93.

• Assuming a decline in the North America unitary HVAC and refrigeration market of approximately 20% in 2020 due to the impact from the COVID-19 pandemic, the company estimates the following financial results for the full year:
• Adjusted revenue down 11-17% from the prior year, compared to previous guidance of 4-8% revenue growth.
• GAAP EPS from continuing operations of $7.07-$8.07, including a pre-tax charge of approximately $10 million expected in the second quarter for restructuring actions; previous guidance was $11.30-$11.90.
• Adjusted EPS from continuing operations of $7.50-$8.50, compared to previous guidance of $11.30-$11.90.
• Corporate expenses of approximately $75 million, compared to previous guidance of $90 million.
• An effective tax rate of 21-22% on an adjusted basis for the full year, unchanged from previous guidance.
• Capital expenditures of approximately $120 million, compared to previous guidance of $153 million.
• Free cash flow of approximately $340 million, compared to previous guidance of $410 million.
• The company repurchased $100 million of stock in the first quarter of 2020, has placed repurchase plans for the second quarter on hold, and will review plans for the third and fourth quarters as the year progresses; previous guidance was for $400 million of stock repurchases in 2020.
• The company's quarterly dividend plans are unchanged, most recently $0.77 per share, or more than $115 million in total for the year.

For earnings history and earnings-related data on Lennox (LII) click here.

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