A. O. Smith Earnings Call Transcripts
Fiscal Year 2026
-
Q3 sales were essentially flat, with North America growth led by boilers and water treatment offset by softer water heaters and China. China divestiture agreements reshape the portfolio; cost inflation is pressuring margins, while FY26 guidance excludes China and raises boiler growth expectations.
-
Q2 2026 saw $1B in sales and $1.03 adjusted EPS, with strong North America performance offsetting China weakness. Free cash flow surged 67%, supporting a 50% increase in share repurchase target. Guidance was narrowed due to softer residential water heater demand, while boiler and water treatment outlooks remain solid.
-
Q1 2026 sales declined 2% year-over-year, with North America up 1% and Rest of World down 11%. Adjusted EPS guidance was lowered due to China weakness and regulatory delays, but strong free cash flow and margin improvement initiatives continue.
Fiscal Year 2025
-
Record 2025 EPS of $3.85 was driven by margin gains in both segments, with North America growth offsetting China declines. 2026 guidance calls for 2–5% sales growth and EPS of $3.85–$4.15, with continued investment in water management and disciplined capital returns.
-
Third-quarter sales rose 4% year-over-year, with strong North America performance offsetting a 12% sales decline in China. EPS increased 15%, and margins expanded in both segments. 2025 guidance was narrowed, with sales now expected flat to up 1% due to China and U.S. residential softness.
-
Q2 2025 sales declined 1% year-over-year to $1B, but EPS rose 1% to $1.07. North America boiler sales grew 6%, while China sales fell 11% amid economic headwinds. 2025 EPS guidance was raised, and a strategic review of the China business was initiated.
-
Q1 2025 saw a 2% sales decline and 5% lower EPS year-over-year, but sequential improvement and strong cost controls. 2025 guidance is maintained despite tariff uncertainty, with pricing and supply chain actions underway to offset cost pressures.
Fiscal Year 2024
-
2024 saw a 1% sales decline and lower earnings, with North America stable and China weak. 2025 guidance calls for flat to modest growth, margin expansion in water treatment, and continued investment in innovation and shareholder returns.
-
Third quarter sales and earnings declined year-over-year, mainly due to weak demand in China and North America water heaters, while North America boiler and water treatment businesses and India saw double-digit growth. 2024 guidance was reaffirmed, with sales expected flat and EPS in the $3.70–$3.85 range.
-
Record Q2 sales and EPS were driven by strong North America water heater and boiler growth, while China and India delivered modest to strong gains. 2024 guidance was reaffirmed, with margin pressures expected in Q3 but recovery anticipated in Q4.