Lennox International (NYSE: LII) stock fell 19.9% through 11 a.m. ET on Wednesday following the release of its second-quarter earnings results. This article was generated with the assistance of artificial intelligence.
The company reported Q2 earnings of $7.72 per share on $1.5 billion in sales, according to the report. While the earnings per share met and slightly exceeded analyst expectations of $7.61, total sales fell short of the nearly $1.6 billion projected by analysts.
Lennox's Q2 sales grew 3% year over year, and operating profit increased 2% year over year. GAAP earnings per share remained nearly flat at $7.72.
Segment performance and market conditions
Performance varied significantly between business segments. Building Climate Solutions, the commercial segment, saw sales grow 24% in Q2. However, Home Comfort Solutions, the residential segment, experienced a 7% decline in sales due to lower volumes.
Lennox stated that the results were affected by 'continued softness in the residential end market.' Residential sales account for approximately 60% of the company's total sales, while commercial sales represent roughly 40%.
Updated 2026 outlook
The company reaffirmed its 2026 sales growth forecast of 8%, consisting of 5% from acquisitions and 3% organic growth. However, Lennox lowered its 2026 earnings forecast by approximately 3%, setting a new range of $23 to $24 per share.
The revised 2026 earnings forecast sits below the $24.52 per share expected by Wall Street analysts. Lennox stock currently trades at 18.4 times the new 2026 earnings forecast immediately following the announcement.