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Lennox Profit Eases on Covid Supply-Chain, Labor Impact

Lennox earnings slipped while revenue was about flat. The stock started Monday trading lower and has moved into the green.

Lennox International  (LII) - Get Lennox International Inc. Report shares eased on Monday after the climate-control products provider reported third-quarter earnings slipped on revenue about flat with a year earlier.

It also lowered the ceiling on part of its earnings guidance. 

Amid strong demand, supply-chain and labor disruption from the pandemic are weighing on the Richardson, Texas, company, it said.

Net income totaled $126.3 million, or $3.41 a share, down from $131.7 million, or $3.42 a share, in the year-earlier quarter.

Sales were $1.06 billion compared with $1.055 billion a year earlier. The latest figure trailed the FactSet analyst consensus of $1.13 billion.

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The pandemic and supply-chain woes took away about $75 million from revenue and $25 million from operating profit, Lennox said. It incurred higher charges for tariffs, material, freight and distribution.

Lennox shares at last check rose 3.9% to $324.22. They have traded on Monday down as much as 6.9% at $290.51. It was up 14% in 2021 through Friday's close.

Going forward, "demand remains strong," Chief Executive Todd Bluedorn said in a statement. "But global supply chain bottlenecks and shortages aren’t expected to be resolved soon, and Covid-19 adds more complexity to labor and production disruptions."

Lennox forecasts earnings from continuing operations of $11.97 a share to $12.17 a share for the full year, compared with its prior projection of $11.97 to $12.57.

It anticipates adjusted earnings from continuing operations of $12.10 a share to $12.30 a share, compared with its previous guidance of $12.10 to $12.70.

Lennox also estimates corporate expenses of $95 million for 2021, down from its prior forecast of $100 million.