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Lennox International Inc. (NYSE:LII), a leader in the air conditioning and heating equipment industry, has announced a change in its auditor relationship. On Monday, the Audit Committee of the Board of Directors approved the engagement of Ernst & Young LLP (EY) as the company’s new independent registered public accounting firm for the upcoming fiscal year ending December 31, 2025.
The decision to appoint EY followed a comprehensive and competitive Request for Proposal (RFP) process initiated by the Audit Committee and management. Multiple firms were invited to participate in the RFP process, which is a part of the company’s commitment to good corporate governance. This commitment is reflected in the company’s strong operational performance, with InvestingPro analysis showing consistent dividend payments for 26 consecutive years and a healthy current ratio of 1.43, indicating strong liquidity management.
This change comes after the committee’s approval to dismiss KPMG, the company’s previous auditor since 2002, on March 7, 2025. KPMG was informed of the decision on March 10, 2025. Reports from KPMG for the fiscal years ending December 31, 2024, and 2023, did not contain any adverse opinions or modifications regarding the company’s financial statements.
There were no disagreements or reportable events between Lennox International and KPMG during the fiscal years and subsequent interim period leading up to the dismissal. KPMG has provided a letter, dated March 13, 2025, to the Securities and Exchange Commission confirming their agreement with the company’s statements regarding their dismissal.
Ernst & Young LLP’s engagement was effective as of March 12, 2025. Prior to their engagement, neither the company nor anyone acting on its behalf consulted with EY on any matters that would require disclosure under the SEC’s regulations.
The switch in certifying accountants is a significant move for Lennox International, as the auditor plays a crucial role in ensuring the accuracy and reliability of financial reporting. The information regarding these changes is based on a press release statement filed with the Securities and Exchange Commission. For investors seeking deeper insights into Lennox International’s financial performance and prospects, InvestingPro offers comprehensive analysis through its Pro Research Report, available as part of its coverage of 1,400+ US equities, providing detailed metrics, fair value analysis, and expert insights for informed investment decisions.
In other recent news, Lennox International reported impressive fourth-quarter 2024 financial results, surpassing both earnings and revenue forecasts. The company achieved an earnings per share of $5.60, well above the expected $4.15, with revenue reaching $1.3 billion, exceeding the forecasted $1.23 billion. Despite these strong results, the stock experienced a decline in aftermarket trading. Additionally, Lennox International marked a significant milestone by exceeding $5 billion in annual revenue for the first time. Looking ahead, the company anticipates core revenue growth of approximately 2% for 2025.
In other developments, Barclays (LON:BARC) analyst Julian Mitchell upgraded Lennox International’s stock rating from Equal Weight to Overweight, raising the price target to $702 from $665. This adjustment reflects higher free cash flow assumptions and a higher valuation multiple. Mitchell’s analysis suggests that Lennox International is undervalued, particularly among short-term investors. The analyst’s perspective indicates a shift in the market’s perception of Lennox International’s future financial performance. These recent developments are likely to be closely monitored by investors and market watchers.
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