Lennox (LII) Tops Q1 EPS by 6c, Beats on Revenues; Offers FY18 EPS Mid-Point Outlook Below Consensus

Lennox (NYSE: LII) reported Q1 EPS of $1.13, $0.06 better than the analyst estimate of $1.07. Revenue for the quarter came in at $835 million versus the consensus estimate of $820.31 million.

FULL-YEAR OUTLOOK

• Updating 2018 guidance for GAAP and adjusted revenue growth from 3-7% with a minimal impact from foreign exchange to 4-8% with a positive 1% impact from foreign exchange.
• Updating 2018 guidance for GAAP EPS from continuing operations from $9.75-$10.35 to $8.79-$9.39, incorporating first-quarter results that included $0.30 in charges for the write-down of assets and divestiture costs associated with the Australia and Asia transaction, as well as expected second-quarter non-cash charges totaling approximately $0.73, or approximately $30 million, associated with the divestiture of the South American business. In the second quarter, the company obtained board approval and signed an agreement with Elgin SA, a private Brazilian company, for the sale of our South American business, subject to Brazilian anti-trust approval, and expects the transaction to close later this year.
• Reiterating 2018 adjusted EPS from continuing operations guidance of $9.75-$10.35.
• Reiterating corporate expense guidance of approximately $85 million.
• Reiterating guidance for an effective tax rate of 22-24% on an adjusted basis for the full year.
• Reiterating capital expenditures of approximately $100 million.
• Reiterating guidance for $350 million of stock repurchases in 2018 and a weighted average diluted share count of 41-42 million shares on a full-year basis.

GUIDANCE:

Lennox sees FY2018 EPS of $9.75-$10.35, versus the consensus of $10.17.

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

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