Lennox (LII) Gears Up For Q2: Another Earnings Beat Coming?

Lennox International, Inc. (NYSE:LII) is slated to release second-quarter 2017 results on Jul 24, before the market opens.

Why a Likely Positive Surprise?

Our proven model shows that Lennox International has the right combination of the two key ingredients.

Zacks ESP: Lennox International has an Earnings ESP of +0.73%, as the Most Accurate estimate of $2.78 comes above the Zacks Consensus Estimate of $2.76.

Lennox International, Inc. Price and EPS Surprise

Lennox International, Inc. Price and EPS Surprise | Lennox International, Inc. Quote

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Lennox International’s Zacks Rank #3 (Hold), when combined with a positive ESP, predicts a likely earnings beat. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Conversely, we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

What’s Driving the Better-Than-Expected Earnings?

Over the last three months, Lennox International’s shares yielded a return of 7.26%, outperforming 5.73% growth recorded by the Zacks categorized Building Products-Air Conditioner/Heating industry.

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

Robust sales in the Variable Refrigerant Flow business are anticipated to bolster the Commercial Heating & Cooling segment’s revenues. Moreover, increased shipments, improved sales volume and favorable price/mix will likely drive the top-line performance in the second quarter.

Lennox International has been boosting its savings on the back of sourcing and engineering-based cost-reduction initiatives. The company is funding its research & development, information technology and distribution expansion programs on the back of these savings. These strategic efforts are anticipated to drive the company’s revenues and profitability.

Also, Lennox International noted that the negative impact of foreign currency translations would be almost negligible in the quarter to be reported.

Key Picks

Here are some stocks within the industry that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Thor Industries, Inc. (NYSE:THO) , with an Earnings ESP of +3.08%, and a Zacks Rank #1.

The Sherwin-Williams Company (NYSE:SHW) , with an Earnings ESP of +0.44%, and a Zacks Rank #1.

TRI Pointe Group, Inc. (NYSE:TPH) , with an Earnings ESP of +5.00%, and a Zacks Rank #2 (Buy).

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