A. O. Smith Earnings Preview: What to Expect
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Milwaukee, Wisconsin-based A.O. Smith Corporation (AOS) manufactures residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products. With a market cap of $9.3 billion, A.O. Smith’s operations span various countries in North America, Europe, and Asia. The company is set to unveil its second-quarter results on Tuesday, Jul. 22.
Ahead of the event, analysts expect AOS to report non-GAAP earnings of $0.97 per share, down 8.5% from the profit of $1.06 per share reported in the year-ago quarter. The company has surpassed or matched the Street’s bottom-line projections in two of the past four quarters, while missing on two other occasions.
For the full fiscal 2025, its earnings are expected to come in at $3.75 per share, up marginally from $3.73 per share reported in the year-ago quarter. While in fiscal 2026, its earnings are expected to rise 9.3% year-over-year to $4.10 per share.
AOS stock has declined 15.5% over the past 52 weeks, underperforming the Industrial Select Sector SPDR Fund’s (XLI) 22.8% surge and the S&P 500 Index’s ($SPX) 13.2% uptick during the same time frame.
AOS stock grew 3.5% following the release of its better-than-expected Q1 earnings on Apr. 29. The company’s net sales decreased 1.5% year-over-year to $963.9 million, but successfully surpassed the Street’s estimates. Its sales were primarily affected by lower water heater volumes. While the boiler sales remained resilient in North America, sales in China were impacted by the lower volume of water treatment and gas water heater products.
Its gross profit also fell 2.4% from the prior year’s quarter to $375.4 million. Furthermore, the company’s net earnings declined 7.5% from its year-ago value to $136.6 million, and its net earnings per share fell 5% year-over-year to $0.95, but surpassed the consensus estimates by 5.6%.
The consensus opinion on AOS is skeptical, with a “Hold” rating overall. Of the 12 analysts covering the stock, opinions include three “Strong Buys,” eight “Holds,” and one “Strong Sell.” Its mean price target of $73.40 suggests an 8.3% upside potential from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
