Lennox International lowered its full-year outlook, citing higher costs, particularly in its residential home business.
The heating and air conditioning company said it now expects full-year revenue to increase 6%, down from its previous guidance of 8%. About 5% of that projected growth is estimated to come from completed acquisitions.
Lennox also cut its outlook for adjusted earnings per share to $21.00 to $21.50, down from $23.00 to $24.00.
Shares fell 6% to $350 in pre-market trading Wednesday.
For the third quarter, Lennox posted a profit of $221.2 million, or $6.41 a share, compared with $259.9 million or $7.38 a share, a year earlier.
Stripping out certain one-time items, adjusted per-share earnings fell 7% to $6.84, behind the $7.36 anticipated by analysts, according to FactSet.
Revenue rose 10% to $1.57 billion. Analysts surveyed by FactSet forecast revenue of $1.58 billion.
Lennox's margins and results fell short of internal expectations, Chief Executive Alok Maskara said. The company is facing tougher competitive pressure, as well as persistent inflation on costs, he said.
Lennox had a $45 million headwind from product cost inflation, with higher fuel costs among the driving factors.
To offset higher expenses, the company is restructuring some of its processes and passing through price increases, Maskara said.
Margins declined in home comfort solutions, which includes residential heating and cooling products. The company made targeted price increases in certain markets and faced higher costs, both of which weighed on profitability.
In July, Maskara said Lennox was dealing with softness in its residential end market because construction of new housing remained stagnant.
Building climate solutions had a better quarter, with 24% revenue growth.
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