Will Lennox (LII) Beat Q3 Earnings On Robust Growth Plans?

We expect Lennox International, Inc. (NYSE:LII) to beat expectations when it reports third-quarter 2016 results on Oct 17 before the market opens.

Why a Likely Positive Surprise?

Our proven model shows that Lennox International is likely to beat earnings because it has the right combination of two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at +4.02% for the stock. This is a meaningful and leading indicator of a likely positive earnings surprise for the company.

Zacks Rank: Lennox International carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank of #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings.

The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

What is Driving the Better-than-Expected Results?

Lennox International engages in designing, manufacturing and marketing of climate control solutions. Its technologically advanced products are primarily used in the heating, ventilation, air conditioning and refrigeration end-markets.

Lennox International intends to generate higher revenues in the quarters head on the back of improved sales volume and favorable price/mix. Earnings in the to-be-reported quarter are estimated to be stronger due to increased revenues, improved operations and strategic cost-management initiatives. Also, the company remains committed toward rewarding its shareholders through dividends and share buybacks.

Lennox International has revised its adjusted EPS guidance to the range of $6.50-$6.90 per share for 2016, higher than the previously stated guidance of $6.30−$6.80. We believe that the guidance has been revised upward by the company on grounds of the bullish prospects of business.

Other Stocks to Consider

Argan, Inc. (NYSE:AGX) , with an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Armstrong World Industries, Inc. (NYSE:AWI) , with an Earnings ESP of +1.32% and a Zacks Rank #2.

DR Horton Inc. (NYSE:DHI) , with an Earnings ESP of +5.20% and a Zacks Rank #2.

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