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A. O. Smith Corporation’s AOS fourth-quarter 2025 adjusted earnings of 90 cents per share beat the Zacks Consensus Estimate of 84 cents. The bottom line increased 6% on a year-over-year basis.
Net sales of $912.5 million missed the consensus estimate of $923 million. The top line remained relatively stable year over year, supported by solid momentum in commercial water heater and boiler markets in North America.
For 2025, A. O. Smith generated revenues of $3.83 billion, up 0.3% year over year. The company’s adjusted earnings came in at $3.85 per share, higher than $3.73 reported in 2024.
A. O. Smith’s quarterly sales in North America (comprising the United States and Canada operations) increased 3.5% year over year to $713.7 million. Our estimate for segmental revenues was $702.5 million. This uptick was caused by benefits from effective pricing.
Segmental earnings were $164.9 million, up 11.5% year over year.
Quarterly sales in the Rest of the World (including China, India and Europe) segment were $205.7 million, down 13.1% year over year. While China sales decreased year over year, organic sales in India rose 18% in local currency.
The segment’s earnings were $16 million, up 105% year over year due to cost reduction actions.
A. O. Smith Corporation price-consensus-eps-surprise-chart | A. O. Smith Corporation Quote
A.O. Smith’s cost of sales was $562.1 million, down 2.1% year over year. Selling, general & administrative expenses were $186.6 million, up 2.5%.
Gross profit increased 3.6% year over year to $350.4 million. The gross margin was 38.4% compared with 37.1% in the year-ago period. Interest expenses were $2.4 million, relatively stable compared with the year-ago quarter.
As of Dec. 31, 2025, AOS’ cash and cash equivalents totaled $174.5 million compared with $239.6 million at the end of December 2024.
At the end of the fourth quarter, long-term debt was $112.7 million compared with $183.2 million at the end of December 2024.
In 2025, cash provided by operating activities totaled $616.8 million compared with $581.8 million in the year-ago period.
In 2025, A.O. Smith repurchased 5.9 million shares for $400.8 million. As of 2025-end, approximately 0.8 million shares were left to be repurchased under the share repurchase authorization.
In January 2026, AOS’ board boosted the buyback program by another 5 million shares. For 2026, it expects to repurchase shares worth approximately $200 million.
A.O. Smith has provided the sales outlook for 2026. The company expects net sales to be in the range of $3.90-$4.02 billion.
Management currently projects adjusted earnings per share to be in the band of $3.85-$4.15.
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.
Some better-ranked stocks from the same space are discussed below:
Nordson Corporation NDSN currently carries a Zacks Rank #2 (Buy). Nordson’s earnings topped the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 2.2%. In the past 60 days, the Zacks Consensus Estimate for Nordson’s fiscal 2026 earnings has increased 2.3%.
Quanta Services, Inc. PWR currently carries a Zacks Rank of 2. Quanta Services’ earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 5.8%. In the past 60 days, the Zacks Consensus Estimate for Quanta Services’ fiscal 2026 earnings has increased 0.6%.
Flowserve Corporation FLS presently carries a Zacks Rank of 2. Flowserve’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 10.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2026 earnings has increased a penny.
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This article originally published on Zacks Investment Research (zacks.com).
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