A. O. Smith Q3 Earnings Surpass Estimates, Sales Increase Y/Y

A. O. Smith Corporation’s AOS third-quarter 2025 adjusted earnings of 94 cents per share beat the Zacks Consensus Estimate of 89 cents. The bottom line increased 15% on a year-over-year basis.
    
Net sales of $942.5 million also surpassed the consensus estimate of $936 million. The top line increased 4% year over year due to higher water heater and boiler sales in North America.

Segmental Details

A. O. Smith’s quarterly sales in North America (comprising the United States and Canada operations) increased 6% year over year to $742.8 million. Our estimate for segmental revenues was $722.2 million. This uptick was caused by higher commercial water heater and boiler volumes.

Segmental earnings were $179.7 million, up 11% year over year.

Quarterly sales in the Rest of the World (including China, India and Europe) segment were $207.9 million, down 1% year over year. Our estimate for sales in the segment was $217.4 million. China sales decreased 12% year over year. Organic sales in India increased 13% year over year in local currency.

The segment’s earnings were $15.4 million, up 13.2% year over year due to cost reduction actions.

AOS’ Margin Details

A.O. Smith’s cost of sales was $578.0 million, up 2.2% year over year. Selling, general & administrative expenses were $188.9 million, up 7%.

Gross profit increased 8.1% year over year to $364.5 million. The gross margin was 38.7% compared with 37.4% in the year-ago period. Interest expenses were $3.6 million, up from $1.5 million in the year-ago quarter.

A.O. Smith’s Liquidity & Cash Flow

As of Sept. 30, 2025, AOS’ cash and cash equivalents totaled $152.7 million compared with $239.6 million at the end of December 2024.

At the end of the quarter, long-term debt was $166.8 million compared with $183.2 million at the end of December 2024.

In the first nine months of 2025, cash provided by operating activities totaled $433.7 million compared with $359.9 million in the year-ago period.

AOS’ Share Repurchases

In the first nine months of 2025, A.O. Smith repurchased 5 million shares for $335.4 million. As of September 2025, approximately 1.8 million shares were left to be repurchased under the existing share repurchase authorization.

A.O. Smith’s 2025 Outlook

A.O. Smith has updated the sales outlook for 2025. The company expects net sales to be in the range of $3.50-$3.80 billion compared with $3.85-$3.93 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-$3.85 compared with $3.70-$3.90 expected earlier. The company reported earnings of $3.73 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 $2.62 per share in third-quarter 2025, beating the Zacks Consensus Estimate of $2.50. This compares with earnings of $2.27 per share a year ago.

Dover posted revenues of $2.08 billion in the quarter, missing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $1.98 billion.

Ardagh Metal Packaging S.A. AMBP came out with earnings of eight cents per share in the third quarter of 2025, beating the Zacks Consensus Estimate of seven cents. This compares with earnings of eight cents per share a year ago.

Ardagh Metal posted revenues of $1.43 billion in the quarter, beating the Zacks Consensus Estimate by 2.7%. This compares with year-ago revenues of $1.31 billion. 

Packaging Corporation of America PKG reported earnings of $2.73 per share in the third quarter, missing the Zacks Consensus Estimate of $2.83. This compares with earnings of $2.65 per share a year ago.

Packaging Corp. posted revenues of $2.31 billion in the quarter, surpassing the Zacks Consensus Estimate by 2.2%. This compares with year-ago revenues of $2.18 billion.

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

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