Lennox International Inc. (NYSE: LII) on Monday reported earnings that disappointed investors. As a result, shares of Lennox stock slipped nearly 4% in value. The Company claims many of its shortfalls during the quarter were directly related to the July 2018 tornado damage at its residential manufacturing facility in Iowa.

A global leader in heating, air conditioning, and refrigeration markets, Lennox reported quarterly earnings of USD 3.74 per share. This missed the Zacks Consensus Estimate of USD 4.15 per share by a substantial margin.

Lennox said revenue fell 6% in the second quarter to USD 1.099 Billion. The Company claims that the revenue decrease was a result of 8% negative impact from the tornado, divestitures and foreign exchange.

Operating income for the quarter was USD 214 Million, a 10% increase. Earnings per share from continuing operations was USD 2.81, a 17% decrease.

Gross profit, on a GAAP adjusted basis, was USD 332 Million and gross margin was 30.2%. Net cash from earnings in the second quarter was USD 30 Million compared to USD 49 Million in the year prior. Free cash flow was USD 20 Million compared to USD 28 Million in the prior year. Total debt at the end of the second quarter came in at USD 1.47 Billion.

"Our Commercial business hit a new second-quarter high for revenue and set new records for segment profit and margin,” said Lennox Chairman and Chief Executive Officer, Todd Bluedorn. Bluedorn continued, “Commercial revenue was up 4%, led by high-single digit growth in National Account equipment business. Segment profit rose 6% to a record $54 million, and segment margin expanded 50 basis points to a record 20.6%. In Refrigeration, adjusted segment revenue rose 5% at constant currency with volume up in Europe and down in North America. Adjusted segment profit was down 19%, and adjusted segment margin declined 340 basis points to 12.8%, due in part to lower mix and the timing of the sale of refrigerant allocations in Europe compared to the prior-year quarter. We continue to expect revenue growth for both of these businesses in the second half but have reduced the outlook on commercial and refrigeration end markets. For the company overall, we are updating 2019 guidance to adjusted revenue growth of 2-5% and adjusted EPS from continuing operations of $11.30-$11.90 and reiterate stock repurchases of $400 million for the full year." Lennox looks to be able to increase revenue growth in the third quarter.