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Lennox International 3Q net profit falls 13 pct

Associated Press Published: October 22, 2012

DALLAS (AP) — Lennox International Inc. said Monday that its third-quarter net profit fell 13 percent, dragged down by a loss at its discontinued residential heating and cooling service unit.

The Dallas-based maker of heating, ventilation, air conditioning and refrigeration products said its net income came in at $29.4 million, or 57 cents per share. That's down from $33.8 million, or 64 cents per share, a year earlier. Revenue rose 1 percent to $809.7 million.

Excluding the service unit's after-tax loss of 40 cents per share, Lennox said it would have made 97 cents per share from continuing operations during the quarter that ended Sept. 30.

The earnings performance beat Wall Street's estimates. Analysts polled by FactSet expected earnings of 95 cents per share. But they also expected revenue of $905.3 million for the quarter.

Lennox also raised its full-year earnings and revenue guidance. The company now expects to make $2.60 to $2.80 per share from continuing operations in 2012, up from prior guidance of $2.35 to $2.65. Analysts polled by FactSet expect revenue of $2.53 per share for the full year.

The company also expects revenue to rise in a range of 5 to 7 percent excluding currency exchange costs. That's up from a range of 3 to 6 percent.

Lennox placed its Service Experts unit up for sale in September, saying it doesn't need to own the network of 108 branches. The unit's dealer-contractors install and service residential heating and cooling equipment. The company said previously it would report the unit's results as discontinued operations starting in the third quarter.

The company said revenue from its heating and cooling businesses grew, but refrigeration revenue dropped due to lower volume and higher sales expenses.

Lennox said its residential heating and cooling business showed strong growth in both the replacement and new construction markets during the quarter, and the company expects that momentum to continue. It said backlog and order rates in commercial and refrigeration look solid.