If you're investing in or just curious about Lennox International (NYSE: LII), it's crucial to know: does this company actually outperform its competition, or is it just riding the HVAC industry wave? This article breaks down Lennox’s financials—like revenue growth and profit margins—versus other major HVAC players such as Carrier Global, Trane Technologies, and Johnson Controls. Along the way, I’ll share some hands-on analysis, a few “oops” moments from my own research, and actual data sourced from public filings and industry experts. If you’ve ever tried to make sense of all those numbers in investor presentations, this one’s for you.
Let’s be honest: every HVAC company claims they’re “leading the market,” but until you stare at the numbers side-by-side, it’s all just marketing fluff. The real game is played in revenue growth rates, profit margins, and how efficiently these companies turn sales into cash. And, as I learned while digging through quarterly reports (sometimes getting lost in spreadsheet hell), the story isn’t always what you’d expect.
First, I went straight to the source—SEC filings, quarterly earnings reports, and financial databases like Yahoo Finance and Morningstar. I focused on fiscal year 2023, since most companies have now filed their annuals.
Here’s what I pulled (rounded for clarity, in USD billions unless noted):
| Company | 2023 Revenue | Revenue Growth YoY | Gross Margin | Operating Margin | Net Margin |
|---|---|---|---|---|---|
| Lennox International | $5.2B | +5.2% | 30.5% | 16.2% | 11.6% |
| Carrier Global | $22.1B | +11.2% | 24.7% | 10.4% | 7.1% |
| Trane Technologies | $18.1B | +11.5% | 31.2% | 15.7% | 11.2% |
| Johnson Controls | $26.6B | +7.0% | 31.0% | 9.8% | 5.2% |
Sources: Lennox 2023 Annual Report, Carrier Global 2023 Annual Report, Trane Technologies 2023 Annual Report, Johnson Controls 2023 Annual Report
So, here’s where it gets interesting. Lennox is smaller in total revenue than the other three, but look at those profit margins: gross margin >30%, operating margin over 16%, and net margin above 11%. That’s actually higher than Carrier and Johnson Controls and just barely edges out Trane on net margin.
When I first checked this, I actually thought I’d made a mistake—how could a company with less scale have better margins? But it checks out, and here’s why: Lennox focuses heavily on the North American residential market, which tends to be higher margin than global commercial projects. Plus, they’re known for tightly controlling costs—an approach that, according to Barron's, has helped them weather both supply chain disruptions and inflationary pressures better than peers.
On revenue growth, Lennox is a bit behind the curve. Their 5.2% YoY growth in 2023 trails Carrier and Trane (both above 11%) and is slightly lower than Johnson Controls. That’s a trade-off: Lennox could chase faster growth by expanding internationally, but that might sacrifice their fat margins.
Industry analyst Emily Parker, during a CNBC segment, summed it up: “Lennox is more of a profit machine than a growth rocket. If you want steady returns and resilience, they’re a solid bet. If you want breakout expansion, Carrier or Trane are more aggressive.”
I wanted to see if investors reward this margin focus. So, I checked the stock performance over the last 12 months (as of May 2024). Lennox’s stock is up ~17%, slightly behind Trane (+22%) and Carrier (+19%), but still ahead of Johnson Controls (+9%). It’s a classic case: Wall Street likes growth, but values steady profit even more during market uncertainty.
A buddy of mine, who manages a commercial HVAC installation firm in Texas, recently had to choose between Lennox and Carrier for a new residential complex. He told me, “Carrier gave us better upfront pricing, but Lennox’s units had lower maintenance costs and better dealer support. When we ran five-year cost projections, Lennox was the clear winner—even though on paper, Carrier looked cheaper at first.”
That kind of story lines up with the numbers: Lennox’s higher margins partly reflect a willingness to walk away from low-margin contracts and focus on long-term value.
Now, if you’re wondering about how these companies handle international standards—like “verified trade” conformity—it gets even more interesting. Each country has its own rules, which affects how easily these HVAC giants can expand overseas.
| Country/Region | Certification Name | Legal Basis | Enforcement Body | Key Differences |
|---|---|---|---|---|
| USA | AHRI Certification | EPA, DOE | AHRI, EPA | Focus on energy efficiency, annual audits |
| EU | CE Marking | EU Directives | European Commission | Safety, EMC, eco-design compliance |
| China | CCC Mark | CNCA Regulations | CNCA | State-mandated factory audits |
For anyone who’s tried to ship HVAC units across borders, these differences aren’t just paperwork—they can make or break a business plan. The WTO Technical Barriers to Trade Agreement (Article 2) is supposed to keep things fair, but in practice, local rules still trip up even big players. Trane and Carrier, with bigger international footprints, spend more on compliance than Lennox, which mostly sticks to North America (WTO TBT Agreement).
To get a real-world perspective, I spoke with HVAC consultant Steven Ray, who’s helped multiple US brands enter the EU market. He put it bluntly: “If you’re Lennox, and you want to keep those margins, you avoid markets with high certification costs unless you’re sure you’ll dominate. Carrier and Trane have the resources to play on every field, but they pay for it with slimmer margins.”
Here’s my takeaway after way too many hours with spreadsheets and a few calls to industry insiders: Lennox International isn’t the biggest, nor the fastest-growing, but it’s one of the most profitable HVAC companies in North America. Their focus on residential, cost control, and selective markets lets them post industry-beating margins. But if you want international growth (and can stomach the certification headaches), Trane and Carrier are more aggressive bets.
Next step? If you’re an investor, decide if you value steady profitability or want to chase growth abroad. For operators and engineers, Lennox’s US focus means better after-sales support and predictable performance. And for anyone exporting HVAC gear, brace yourself for a maze of “verified trade” rules—start with the WTO TBT Agreement or check local certification bodies before you ship.
If you want to dig deeper, I’d recommend reading the OECD’s 2017 report on non-tariff measures for a primer on cross-border certification headaches, or just scroll through the latest Lennox annual filings—it’s all there, if you don’t mind getting lost in the footnotes!