Lennox cuts 2026 profit forecast, misses Q3 estimates

Lennox International Inc. (LII) cut its full-year 2026 adjusted earnings forecast and reported third-quarter results that fell short of its own expectations, the company said in an 8-K filing dated Oct. 28.

Adjusted diluted earnings per share were $6.84 in the third quarter, below the $7.42 consensus estimate compiled by Finnhub. Revenue was $1.57 billion, below the $1.59 billion consensus estimate from the same source.

Here's how the company did:

• Adjusted diluted EPS: $6.84 vs. $7.42 expected, according to Finnhub
• Revenue: $1,572.5 million vs. $1,426.8 million a year earlier, and $1.59 billion expected, according to Finnhub
• GAAP diluted EPS: $6.41 vs. $7.38 a year earlier
• Operating income: $312.1 million vs. $328.8 million a year earlier

Revenue rose 10% from a year earlier. The company said the increase was driven by organic growth in Building Climate Solutions and by contributions from completed acquisitions.

Total segment profit was $323 million, down 2%, and the total segment margin fell 240 basis points to 20.6%.

Chief Executive Officer Alok Maskara said the company's “margins and results fell short of our expectations.” He pointed to heightened competitive pressure and persistent inflation on costs.

2026 guidance

The company cut its adjusted EPS forecast to $21.00 to $21.50, from the $23.00 to $24.00 range it gave on July 29.

Revenue growth guidance is now approximately 6%, including a 5% benefit from completed acquisitions. The July 29 guidance was approximately 8%.

Free cash flow guidance is $700 million to $750 million, down from $750 million to $850 million.

Segment results

Home Comfort Solutions revenue rose 3% to $937 million. Segment profit fell 18% to $176 million, and segment margin declined 490 basis points to 18.7%.

The company said product cost inflation, including tariffs, and lower factory absorption cost the segment $32 million.

Building Climate Solutions revenue rose 24% to $635 million. Segment profit rose 19% to $167 million, and segment margin declined 110 basis points to 26.2%.

The company said that margin followed record margins in the prior-year period.

Cash and charges

Operating cash flow was $395 million, compared with $301 million a year earlier, driven by reduced inventory levels.

Share repurchases totaled $151 million in the quarter.

The company recorded $8.2 million in restructuring charges and $3.8 million in acquisition costs.