DALLAS - Lennox International Inc. (NYSE: NYSE:LII), a global provider of climate-control solutions, has announced robust financial results for the fourth quarter and full year of 2023, with a notable increase in revenue and earnings per share. The company's fourth-quarter revenue reached $1.2B, a 6% rise compared to the same period last year, while core revenue, excluding European Operations, grew by 7% to $1.1B.
The company's GAAP diluted earnings per share (EPS) for the quarter increased by 52% to $4.04, and the adjusted diluted EPS saw a 41% rise to $3.63. For the full year, Lennox reported a revenue increase of 6% to $5B, with a core revenue growth of 6% to $4.7B. The GAAP diluted EPS for the year went up by 19% to $16.54, and the adjusted diluted EPS improved by 27% to $17.96.
Lennox's operating cash flow demonstrated a significant uptick, surging by 132% to $306 million in the fourth quarter and by 144% to $736M for the full year. The company attributes its financial successes to the effective execution of its transformation strategy, which included regulatory changes, production enhancements, supply chain resiliency, and pricing programs.
The Home Comfort Solutions segment reported a modest revenue growth of 1%, while the Building Climate Solutions segment saw a more substantial increase of 19% in revenue, driven by pricing and volume gains.
Looking ahead, Lennox anticipates a 7% increase in core revenue for the full year 2024, primarily due to price and mix, as sales volumes are expected to remain relatively flat. The adjusted EPS is projected to range between $18.50 and $20.00, with capital expenditures estimated at approximately $175M and free cash flow between $500M and $600M.
The company successfully divested its European operations late in the fourth quarter, which had contributed $56M in revenue and $1.6M in profit for the quarter.
This report is based on a press release statement from Lennox International Inc. and provides a summary of the company's financial performance without speculation on future market trends or broader industry impacts.
InvestingPro Insights
In light of Lennox International Inc.'s recent financial achievements, InvestingPro data provides additional context to gauge the company's market standing and future potential. Lennox International currently holds a market capitalization of $15.91B, reflecting its significant presence in the climate-control industry. The company's P/E ratio stands at 29.31, which is high when considering the near-term earnings growth, indicating that investors may be expecting higher earnings in the future. Adjusting for the last twelve months as of Q3 2023, the P/E ratio slightly decreases to 26.94.
A noteworthy InvestingPro Tip is that Lennox International has raised its dividend for 14 consecutive years, demonstrating a commitment to returning value to shareholders. This is further supported by the company maintaining dividend payments for 25 consecutive years, signifying financial stability and a shareholder-friendly policy. However, it's important to note that five analysts have revised their earnings downwards for the upcoming period, which could be a signal for investors to watch for potential changes in the company's financial trajectory.
With a robust return on assets of 19.58% for the last twelve months as of Q3 2023, Lennox International showcases effective asset utilization. Additionally, the company's stock is trading near its 52-week high, with a price percentage of 97.74% of the high, indicating investor confidence and a strong market performance over the past year.
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