Bullish stock to watch: Lennox International Inc. (NYSE: LII)

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Lennox International Inc. (NYSE: LII) stock rose over 3.9% on 20th July, 2020 (as of  9:54 am GMT-4; Source: Google finance) as the firm improved its full year 2020 guidance against its previous estimates. The firm now expects its adjusted revenue to fall 10-15% against its earlier estimate of a fall in the range of 11-17%. GAAP EPS from continuing operations is now expected to be $7.31-$8.11 against earlier forecast of $7.07-$8.07. They expected adjusted EPS from continuing operations to $7.90-$8.70 against earlier estimate of $7.50-$8.50. The firm expects Capital expenditures to be $120 million while free cash flow of over $340 million. The firm maintained its quarterly dividend plans at $0.77 per share, or more than $115 million in total for the year. The company held its remaining 2020 stock repurchase program of $300 million.

As per the second quarter of 2020 performance, the Residential Heating & Cooling division Revenue lost 6% yo $645 million, down 6% while Segment margin reached 19.7% against 22.3% in pcp or 19.6% excluding the $18 million insurance benefit. The Residential results were hurt by the year-over-year difference in insurance benefit, higher warranty expense, and the COVID-19 pandemic which led to lower volume and factory inefficiencies. The Commercial Heating & Cooling segment revenue fell 28% yoy to $188 million, while margin fell to 18.9% against the 20.6% in prior corresponding period. The Refrigeration segment Adjusted revenue fell 27% yoy to $108 million, while the segment adjusted profit fell to $9 million against the $19 million in the prior-year quarter. The Segment margin lost to 8.2% against the 12.8% in the prior-year quarter.

(PRNewsfoto/Lennox International Inc.)

The group’s overall Revenue fell 14% yoy to $941 million during the second quarter, while Gross profit fell to $276 million on a GAAP basis and $275 million on an adjusted basis, against $332 million in the prior-year quarter. The GAAP gross margin fell to 29.3% while the adjusted gross margin was 29.2%, against the 30.2% in the prior-year quarter. The income from continuing operations on a GAAP basis during the second quarter was $100.6 million, or $2.62 per share, against the $111.0 million, or $2.81 per share, in the prior-year quarter. Net cash from operations improved to $105 million, against the $30 million in the prior-year quarter. Free cash flow was over $87 million against the $20 million in the second quarter a year ago.

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