What Happened?
Shares of climate control solutions innovator Lennox International (NYSE: LII) jumped 8.9% in the afternoon session after the company reported record second-quarter financial results and raised its full-year guidance. The company announced that its revenue and earnings for the quarter surpassed Wall Street's expectations, driven by strong pricing and favorable product mix. Revenue for the second quarter rose 3% to $1.5 billion, while adjusted earnings per share jumped 14% to $7.82. In a sign of confidence for the remainder of the year, Lennox boosted its full-year earnings per share (EPS) forecast to a new range of $23.25 to $24.25. EPS is a widely used metric of a company's profitability. The updated guidance suggested management's optimism about continued demand for its climate-control products. Investors were also impressed by the company's expanding profit margins, which indicated strong operational efficiency even with softer sales volumes.
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What Is The Market Telling Us
Lennox’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 7.9% on the news that the company reported underwhelming fourth-quarter results and provided full-year EPS guidance, which missed Wall Street's estimates.
On the other hand, Lennox blew past analysts' organic revenue expectations this quarter. We were also excited its EPS outperformed Wall Street's estimates by a wide margin. Overall, this was a mixed yet weaker quarter, suggesting expectations were high ahead of the result.
Lennox is up 11% since the beginning of the year, and at $670.84 per share, it is trading close to its 52-week high of $678.43 from November 2024. Investors who bought $1,000 worth of Lennox’s shares 5 years ago would now be looking at an investment worth $2,538.
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