Q4 Financial Peaks and Valleys: Comparing Lennox (NYSE:LII) With Other HVAC and Water System Companies

Analyzing Q4 Results: Lennox and Its Industry Peers

We take a closer look at how Lennox (NYSE:LII) and other companies in the HVAC and water systems sector performed now that the fourth quarter earnings season has wrapped up.

Companies in the HVAC and water systems space provide vital infrastructure for buildings, such as water heaters and ventilation systems. Because these products have predictable lifespans, a portion of their revenue comes from regular replacements. Over the past ten years, growing interest in energy efficiency and clean water has spurred innovation and created additional demand. However, new installations are closely tied to trends in residential and commercial construction, which can fluctuate with broader economic conditions like changes in interest rates.

Among the nine HVAC and water systems companies we monitor, Q4 was generally sluggish, with collective revenues matching what analysts had forecast.

Despite this, share prices across the group have remained stable, with an average increase of 3.3% since the latest earnings announcements.

Lennox (NYSE:LII): Company Overview and Q4 Performance

Headquartered in Texas and with a history spanning more than 100 years, Lennox specializes in climate control, offering a range of heating, ventilation, air conditioning, and refrigeration (HVACR) products.

For the fourth quarter, Lennox posted revenue of $1.20 billion, representing an 11.2% decline compared to the previous year. This figure was 5.7% below what analysts had anticipated. The company missed both revenue and adjusted operating income expectations, making for a challenging quarter.

CEO Alok Maskara commented, "Despite industry challenges, we are proud of our 2025 performance. For the first time, Lennox achieved annual margins above 20%, a significant milestone made possible by our cost-saving initiatives and product mix improvements."

Among its peers, Lennox experienced the slowest revenue growth. Interestingly, the stock price has climbed 10.5% since the earnings release, now trading at $551.00.

Top Performer in Q4: Northwest Pipe (NASDAQ:NWPX)

Northwest Pipe, a key supplier for Texas's Integrated Pipeline (IPL) project—which delivers approximately 350 million gallons of water daily—manufactures pipeline systems for water infrastructure needs.

In the fourth quarter, Northwest Pipe reported $125.6 million in revenue, a 5% increase year-over-year and 3% above analyst estimates. The company exceeded expectations for both earnings per share and EBITDA, marking a standout quarter.

Investors responded positively, with the stock rising 10.5% since the results were announced, currently trading at $81.77.

Q4's Weakest Showing: CSW (NYSE:CSW)

With over 200 years of combined experience, CSW produces specialty chemicals, coatings, sealants, and lubricants for a variety of industries.

CSW's fourth quarter revenue reached $233 million, up 20.3% from the prior year but 6% below analyst expectations. The company missed both revenue and adjusted operating income targets, resulting in a disappointing quarter.

CSW underperformed its peers in meeting analyst forecasts. Unsurprisingly, its stock has dropped 7.2% since the earnings report and is now priced at $278.27.

Carrier Global (NYSE:CARR): Q4 Review

Founded by the creator of modern air conditioning, Carrier Global manufactures a wide range of HVAC and refrigeration solutions.

Carrier Global reported $4.84 billion in revenue for the fourth quarter, a 6% decrease year-over-year and 3% below analyst projections. The company missed both revenue and adjusted operating income estimates, making for a lackluster quarter.

Following the report, Carrier Global's stock has declined 4.1% and is now trading at $60.96.

A. O. Smith (NYSE:AOS): Q4 Highlights

Recognized for inventing the glass-lined water heater, A.O. Smith manufactures water heating and treatment equipment for multiple sectors.

In Q4, A. O. Smith posted $912.5 million in revenue, unchanged from the previous year and 1.5% below analyst expectations. The company missed both quarterly revenue and full-year guidance targets.

Despite the slow quarter, A. O. Smith raised its full-year guidance more than any of its competitors. Its stock has increased 5.5% since the earnings announcement and is currently valued at $73.31.

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