Lennox (NYSE: LII) has reported its first quarter financial results, with revenue growing by 2% to reach $1.1 billion. The GAAP operating income was reported at $156 million, showing a 7% decrease in segment profit. GAAP diluted earnings per share (EPS) stood at $3.37, representing a 3% decrease in adjusted diluted EPS.
The Home Comfort Solutions segment achieved a 7% revenue growth, driven by favorable product and channel mix along with sustained pricing excellence. However, segment profit margins decreased by 40 basis points, primarily due to tariff and commodity impacts. On the other hand, the Building Climate Solutions segment saw a 6% decrease in revenue, with sales volumes impacted by the timing of customer transitions to low global warming potential (GWP) products.
The company's adjusted net income was reported at $120 million, or $3.37 per share, compared to $124 million, or $3.47 per share, in the prior-year quarter. Operating cash flow used was $36 million compared to $23 million in the prior-year quarter, with net capital expenditures at $25 million compared to $29 million in the prior-year quarter. Lennox also repurchased $85 million in shares during the quarter.
For the full year 2025, Lennox has narrowed its adjusted earnings per share guidance to a range of $22.25 to $23.50, with revenue still anticipated to increase by approximately 2%. The company also expects additional pricing gains to overcome tariffs while preserving profit margins and offsetting the impact of potential volume declines. Capital expenditures are projected to be approximately $150 million, and the free cash flow range remains at $650 million to $800 million.
Despite these challenges, Lennox remains focused on being a reliable partner to its customers and making necessary pricing adjustments to maintain supply chain stability. The company's CEO, Alok Maskara, emphasized the strength of their replacement-driven business model and the value of their North American-focused strategy in navigating the shifting trade dynamics.
Lennox is a leader in energy-efficient climate-control solutions, dedicated to sustainability and creating comfortable and healthier environments for residential and commercial customers while reducing their carbon footprint. The market has reacted to these announcements by moving the company's shares -8.9% to a price of $508.95. Check out the company's full 8-K submission here.
