Carrier, Lennox report Q2 earnings, see residential volume growth ahead

Carrier and Lennox this week reported Q2 earnings — with optimism.

The big picture: After a tough 18 months, both companies finally anticipate growth in residential unit volume during the second half of 2024.

• Last year, Lennox’s residential volume fell by 5%, while Carrier’s North American residential revenue dropped “high-teens.” 

Highlights: In Q2, Carrier generated $6.7 billion in revenue, up 12% year-over-year, and Lennox reeled in $1.45 billion, up 8% year-over-year.

• Lennox’s revenue growth was primarily driven by “pricing excellence” — a nod to recent price increases.

• It also formed a joint venture with Samsung to sell ductless systems in the U.S. and grow its heat pump sales. 

• Both CEOs reconfirmed that prices for equipment utilizing A2L refrigerants will increase by about 10% over the next year. 

• See Carrier and Lennox’s full presentations. 

Of note: Analysts on earnings calls questioned both companies about the rollout of A2L equipment. Carrier CEO Dave Gitlin responded, “We thought 454B could be closer to 20% [of this year’s sales]. I think it's going to be less than 10%, maybe closer to 5%.”

• “I don't think a lot of our distributors and dealers are in a major rush to put in the 454B. But we think that as you get into next year, it's probably closer to 80%,” he added.

When asked about the recent Johnson Controls deal it lost to Bosch, Lennox CEO Alok Maskara comically said, “I’ll start [by] congratulating the management team at Bosch and the management team at JCI.” 

• “I’m sure it was hours and hours of hard work, [and] lost sleep on multiple weekends… not that I’m speaking from experience on the same transaction or anything, but I just want to congratulate them.”

Looking ahead: Carrier expects residential unit volume to be “up year-over-year in each of the remaining quarters,” but didn’t disclose specifics.

• Meanwhile, Lennox projects volume to grow “low-single-digits” this year.