Lennox falls after a profit miss and a cut to its earnings outlook
Earnings results
- EPS miss -7.1%
Actual: $6.84 · Cons.: $7.36 (adjusted diluted EPS)
- Revenue miss -0.5%
Actual: $1.5725B · Cons.: $1.58B (GAAP net sales)
- Guidance
Cut FY2026 adjusted EPS to $21.00–$21.50 from $23.00–$24.00.
Earnings and the stock move
Lennox reported third-quarter results on October 28 and cut its full-year adjusted earnings outlook to $21–$21.5 from $23–$24. Higher sales did not translate into higher profit: residential competition, targeted price adjustments, inflation and tariff costs squeezed margins. Our analysis: the investment question is whether pricing and productivity can repair residential profitability while commercial growth continues, rather than whether acquisitions alone can lift reported revenue.
Q3 2026 earnings recap
Lennox fell 8.03% to $342.19 on October 28, 2026 after missing profit estimates and cutting its earnings outlook. Competition and higher costs are squeezing the benefit from stronger sales.
- Lennox makes heating, cooling and refrigeration equipment, with parts and services alongside it. Revenue grew 10.2% to $1.57 billion, close to the $1.58 billion estimate.
- Adjusted EPS, or profit per share excluding specified items, was $6.84 versus a $7.36 estimate: a 7.1% miss. Reported GAAP profit per share was $6.41.
- The full-year adjusted profit forecast fell to $21–$21.5 per share from $23–$24. That cuts the midpoint by about 9.6%, shifting attention from sales growth to profit recovery.
- Home-comfort revenue rose 3%, but its profit margin fell to 18.7% from 23.6%. Selective price adjustments to defend market share, inflation and tariffs weighed on profitability.
- Building-climate revenue grew 24%, including 15% growth excluding acquisitions. Its 26.2% profit margin gives Lennox a stronger business to offset some residential pressure.
- Cash generation improved as inventory fell: free cash flow reached $362.7 million, up from $265.3 million. That is cash left after capital spending, which can support dividends and debt payments.
Watch whether pricing and productivity rebuild margins. The decline tests October lows near $340–$350; losing $340 would weaken support, while regaining $357–$364 would strengthen a recovery attempt.
Financials and technicals
Charts through Oct 27, 2026. The session move above may reflect later news.
Technical setup and risks
The October 28 decline tests October lows near $340–$350. A close below $340 would weaken support; regaining the repeated October trading area at $357–$364 would strengthen a recovery attempt. These levels are conditional observations.
AI-assisted research with source and calculation checks. Prices may be delayed. Technical charts use the stated completed session, which can precede the quoted intraday move. Educational information; investing involves risk.