A. O. Smith Q2 Earnings Surpass Estimates, Sales Decline Y/Y

A. O. Smith Corporation’s AOS second-quarter 2025 adjusted earnings of $1.07 per share beat the Zacks Consensus Estimate of 97 cents. The bottom line increased 1% on a year-over-year basis.

Net sales of $1.01 billion also surpassed the consensus estimate of $990.9 million. However, the top line decreased 1% year over year due to lower water heater volumes and decreased sales in China.

Segmental Details

A. O. Smith’s quarterly sales in North America (comprising the United States and Canada operations) decreased 1% year over year to $779 million. Our estimate for segmental revenues was $758.9 million. This downtick was caused by lower water heater volumes.

Segmental earnings were $198.1 million, flat year over year.

Quarterly sales in the Rest of the World (including China, India and Europe) segment were $240.1 million, down 2% year over year. Our estimate for sales in the segment was $236.0 million. China sales decreased 11% year over year. Sales in India increased 19% year over year in local currency.

The segment’s earnings were $25.3 million, down 2.3% year over year due to cost reduction actions.

AOS’ Margin Details

A.O. Smith’s cost of sales was $614.2 million, down 2.2% year over year. Selling, general & administrative expenses were $191.3 million, up 1.5%.

Gross profit increased 0.3% year over year to $397.1 million. The gross margin was 39.3% compared with 38.7% in the year-ago period. Interest expenses were $4.6 million, up from $1.8 million in the year-ago quarter.

A.O. Smith’s Liquidity & Cash Flow

As of June 30, 2025, AOS’ cash and cash equivalents totaled $177.9 million compared with $239.6 million at the end of December 2024.

At the end of the quarter, long-term debt was $284.2 million compared with $183.2 million at the end of December 2024.

In the first six months of 2025, cash provided by operating activities totaled $178.3 million compared with $164 million in the year-ago period.

AOS’ Share Repurchases

In the first six months of 2025, A.O. Smith repurchased 3.8 million shares for $251.3 million. As of June 2025, 3 million shares were left to be repurchased under the existing share repurchase authorization.

A.O. Smith’s 2025 Outlook

A.O. Smith has raised the sales outlook for 2025. The company expects net sales to be in the range of $3.85-$3.93 billion compared with $3.8-$3.9 billion anticipated earlier. It reported sales of $3.82 billion in 2024.

Management currently projects adjusted earnings per share (EPS) to be in the band of $3.70-$3.90 compared with $3.60-$3.90 expected earlier. The company reported earnings of $3.63 per share in 2024.

AOS’ Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Dover Corporation DOV reported earnings of $2.44 per share in second-quarter 2025, beating the Zacks Consensus Estimate of $2.39. This compares with earnings of $2.36 per share a year ago.

Dover posted revenues of $2.05 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $2.18 billion.

Teck Resources Limited TECK came out with earnings of $0.27 per share in the second quarter of 2025, beating the Zacks Consensus Estimate of $0.2. This compares with earnings of $0.58 per share a year ago.

Teck Resources posted revenues of $1.46 billion in the quarter, missing the Zacks Consensus Estimate by 8.7%. This compares with year-ago revenues of $2.83 billion. 

Packaging Corporation of America PKG reported earnings of $2.48 per share, beating the Zacks Consensus Estimate of $2.44. This compares with earnings of $2.2 per share a year ago.

Packaging Corp. posted revenues of $2.17 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.5%. This compares with year-ago revenues of $2.08 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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