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A.O. Smith (AOS) Q1 Earnings Beat, Posts Record Sales

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A. O. Smith Corporation (AOS - Free Report) is one of the leading manufacturers of commercial and residential water heating equipment, as well as water treatment products of the world. The company specializes in offering innovative and energy-efficient solutions and products, which are developed and sold on a global platform.

A.O. Smith’s thriving residential and commercial boiler businesses have consistently stoked top- and bottom-line growth over the past several quarters Factors including growth of households, thriving replacement market, geographic expansion and improved product mix are likely to act as tailwinds for China.

A.O. Smith’s sales of residential and commercial boilers are largely driven by innovation by Lochinvar. Products of this brand have benefited from the transition from lower-efficiency to higher-efficiency boilers, product introduction and market share gain. This apart, the Aquasana buyout, which was completed last year, is expected to stoke inorganic growth of the company, going forward.

AOS has had a decent earnings surprise history, having beaten earnings thrice in the trailing four quarters, with an average positive surprise of 3.9%.

A. O. Smith Corporation Price, Consensus and EPS Surprise

Currently, AOS has a Zacks Rank #2 (Buy) but that could change following its first-quarter 2018 earnings report which has just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We have highlighted some of the key details from the announcement below:

Earnings: AOS beats on earnings. Adjusted earnings per share for the quarter came in at 60 cents, ahead of the Zacks Consensus Estimate of 58 cents.

Revenue: Revenues of $788 million marginally missed the Zacks Consensus Estimate of $793 million. However, sales rose 6.5% year over year.

Key Stats: A.O. Smith started 2018 with good momentum, with record sales growth driven by consistent strong demand for its consumer products in China and positive end markets for its water heaters and boilers in North America. The company also raised its guidance for 2018, and expects adjusted earnings to lie in the range of $2.55 and $2.61 per share. The mid-point of the range reflects an impressive year-over-year growth of 19%.

Stock Price: AOS shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.

Check back for our full write up on this AOS earnings report later!

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