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Is a Beat in Store for A. O. Smith (AOS) in Q4 Earnings?
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A. O. Smith Corporation (AOS - Free Report) is likely to witness top-line and bottom-line growth when it reports fourth-quarter 2023 results on Jan 30, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $982.4 million, which suggests growth of 5% from the prior-year quarter’s reported figure.
The consensus mark for earnings is pinned at 95 cents per share, which has improved 2.3% in the past 60 days. The figure indicates a jump of 10.5% from the figure reported in the prior-year quarter. The company’s bottom line surpassed the Zacks Consensus Estimate by 13.9% in the last reported quarter. It has a trailing four-quarter earnings surprise of 14%, on average.
Let’s see how things have shaped up for A.O. Smith this earnings season.
Factors to Note
A. O. Smith’s North American segment is expected to have benefited from strong demand for residential water heaters, supported by its robust direct and retail selling channels in the fourth quarter. Strength in the residential water heater industry and solid demand for water treatment products are likely to have driven the segment’s performance in the quarter. However, lower boiler sales might have weighed on results. We expect revenues from the company’s North American segment to increase 5.4% year over year to $729.3 million in the fourth quarter.
Also, the strong demand for commercial water treatment products, along with its focus on price management, is likely to have boosted the performance of the Rest of the World segment. The fourth-quarter results are also expected to reflect the benefits of improving supply chains and higher shipments. For 2023, the company expects sales in China and India to grow 3-5% and 15%, respectively, on a year-over-year basis.
Acquisitions made by A. O. Smith are likely to have impacted its top line positively in fourth-quarter 2023. In June 2022, the company acquired Atlantic Filter, which boosted its position in the water treatment industry and strengthened its customer base in Florida and the adjacent regions. Also, the acquisition of Canada-based Giant Factories in October 2021 expanded the company’s commercial water heater offerings.
However, over time, A. O. Smith’s performance has been negatively impacted by high costs and expenses. Although supply-chain constraints moderated, labor shortage and an increase in raw material cost might have been the spoilsport in the to-be-reported quarter. We expect the company’s selling, general and administrative expenses to escalate 12.4% year over year in the to-be-reported quarter.
Our proven model suggests an earnings beat for AOS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: A. O. Smith has an Earnings ESP of +3.80% as the Most Accurate Estimate is pegged at 99 cents, which is higher than the Zacks Consensus Estimate of 95 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: A. O. Smith presently carries a Zacks Rank of 2.
Other Stocks With the Favorable Combination
Here are a few other companies, which according to our model, have the right combination to beat on earnings this reporting cycle:
AZZ’s earnings for the to-be-reported quarter are expected to increase 126.7%. The consensus mark for its quarterly earnings has moved down by 4.2% to 68 cents per share in the past 60 days.
The Zacks Consensus Estimate for AZZ’s quarterly revenues is pegged at $352.5 million, which suggests growth of 4.7% from the figure reported in the prior-year quarter.
Eaton Corporation (ETN - Free Report) has an Earnings ESP of +0.20% and currently carries a Zacks Rank #2. The company is likely to register growth in the top and bottom lines when it reports fourth-quarter 2023 numbers. The consensus mark for ETN’s quarterly earnings has moved up by 0.4% to $2.47 per share in the past 60 days. The consensus estimate suggests 19.9% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Eaton’s quarterly revenues is pegged at $5,890 million, suggesting growth of 9.5% from the figure reported in the prior-year quarter.
Alarm.com Holdings (ALRM - Free Report) has an Earnings ESP of +8.79% and carries a Zacks Rank #3. ALRM’s earnings for the to-be-reported quarter are expected to decrease 9.4% on a year-over-year basis. The consensus mark for its quarterly earnings has moved up by 4.3% to 48 cents per share in the past 60 days.
The Zacks Consensus Estimate for Alarm.com’s quarterly revenues is pegged at $225.2 million, which suggests growth of 8.2% from the figure reported in the prior-year quarter.
Image: Bigstock
Is a Beat in Store for A. O. Smith (AOS) in Q4 Earnings?
A. O. Smith Corporation (AOS - Free Report) is likely to witness top-line and bottom-line growth when it reports fourth-quarter 2023 results on Jan 30, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $982.4 million, which suggests growth of 5% from the prior-year quarter’s reported figure.
The consensus mark for earnings is pinned at 95 cents per share, which has improved 2.3% in the past 60 days. The figure indicates a jump of 10.5% from the figure reported in the prior-year quarter. The company’s bottom line surpassed the Zacks Consensus Estimate by 13.9% in the last reported quarter. It has a trailing four-quarter earnings surprise of 14%, on average.
Let’s see how things have shaped up for A.O. Smith this earnings season.
Factors to Note
A. O. Smith’s North American segment is expected to have benefited from strong demand for residential water heaters, supported by its robust direct and retail selling channels in the fourth quarter. Strength in the residential water heater industry and solid demand for water treatment products are likely to have driven the segment’s performance in the quarter. However, lower boiler sales might have weighed on results. We expect revenues from the company’s North American segment to increase 5.4% year over year to $729.3 million in the fourth quarter.
Also, the strong demand for commercial water treatment products, along with its focus on price management, is likely to have boosted the performance of the Rest of the World segment. The fourth-quarter results are also expected to reflect the benefits of improving supply chains and higher shipments. For 2023, the company expects sales in China and India to grow 3-5% and 15%, respectively, on a year-over-year basis.
Acquisitions made by A. O. Smith are likely to have impacted its top line positively in fourth-quarter 2023. In June 2022, the company acquired Atlantic Filter, which boosted its position in the water treatment industry and strengthened its customer base in Florida and the adjacent regions. Also, the acquisition of Canada-based Giant Factories in October 2021 expanded the company’s commercial water heater offerings.
However, over time, A. O. Smith’s performance has been negatively impacted by high costs and expenses. Although supply-chain constraints moderated, labor shortage and an increase in raw material cost might have been the spoilsport in the to-be-reported quarter. We expect the company’s selling, general and administrative expenses to escalate 12.4% year over year in the to-be-reported quarter.
A. O. Smith Corporation Price and EPS Surprise
A. O. Smith Corporation price-eps-surprise | A. O. Smith Corporation Quote
Earnings Whispers
Our proven model suggests an earnings beat for AOS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: A. O. Smith has an Earnings ESP of +3.80% as the Most Accurate Estimate is pegged at 99 cents, which is higher than the Zacks Consensus Estimate of 95 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: A. O. Smith presently carries a Zacks Rank of 2.
Other Stocks With the Favorable Combination
Here are a few other companies, which according to our model, have the right combination to beat on earnings this reporting cycle:
AZZ Inc. (AZZ - Free Report) has an Earnings ESP of +2.71% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
AZZ’s earnings for the to-be-reported quarter are expected to increase 126.7%. The consensus mark for its quarterly earnings has moved down by 4.2% to 68 cents per share in the past 60 days.
The Zacks Consensus Estimate for AZZ’s quarterly revenues is pegged at $352.5 million, which suggests growth of 4.7% from the figure reported in the prior-year quarter.
Eaton Corporation (ETN - Free Report) has an Earnings ESP of +0.20% and currently carries a Zacks Rank #2. The company is likely to register growth in the top and bottom lines when it reports fourth-quarter 2023 numbers. The consensus mark for ETN’s quarterly earnings has moved up by 0.4% to $2.47 per share in the past 60 days. The consensus estimate suggests 19.9% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Eaton’s quarterly revenues is pegged at $5,890 million, suggesting growth of 9.5% from the figure reported in the prior-year quarter.
Alarm.com Holdings (ALRM - Free Report) has an Earnings ESP of +8.79% and carries a Zacks Rank #3. ALRM’s earnings for the to-be-reported quarter are expected to decrease 9.4% on a year-over-year basis. The consensus mark for its quarterly earnings has moved up by 4.3% to 48 cents per share in the past 60 days.
The Zacks Consensus Estimate for Alarm.com’s quarterly revenues is pegged at $225.2 million, which suggests growth of 8.2% from the figure reported in the prior-year quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.