We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
A. O. Smith Earnings Surpass Estimates in Q4, Sales Miss
Read MoreHide Full Article
Key Takeaways
AOS beats Q4 earnings estimates as adjusted EPS rose 6% year over year despite flat overall sales.
A. O. Smith saw North America sales climb 3.5%, driven by pricing and strong commercial heater demand.
AOS expanded margins, reduced debt and boosted its buyback plan while guiding higher sales and EPS for 2026.
A. O. Smith Corporation’s (AOS - Free Report) 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.
Segmental Details
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 and EPS Surprise
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.
A.O. Smith’s Liquidity & Cash Flow
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.
AOS’ Share Repurchases
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’s 2025 Outlook
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.
Some better-ranked stocks from the same space are discussed below:
Nordson Corporation (NDSN - Free Report) 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 - Free Report) 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 - Free Report) 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
A. O. Smith Earnings Surpass Estimates in Q4, Sales Miss
Key Takeaways
A. O. Smith Corporation’s (AOS - Free Report) 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.
Segmental Details
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 and EPS Surprise
A. O. Smith Corporation price-consensus-eps-surprise-chart | A. O. Smith Corporation Quote
AOS’ Margin Details
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.
A.O. Smith’s Liquidity & Cash Flow
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.
AOS’ Share Repurchases
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’s 2025 Outlook
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.
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.
Some better-ranked stocks from the same space are discussed below:
Nordson Corporation (NDSN - Free Report) 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 - Free Report) 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 - Free Report) 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.