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A. O. Smith Gears Up to Report Q3 Earnings: Here's What to Expect
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Key Takeaways
AOS's Q3 revenues are likely to rise 1.9% to $960M, while EPS is expected to decline 4.3%.
Solid boiler & water treatment demand may lift sales, but weak China demand could weigh on results.
Higher costs may pressure margins, while the Leonard Valve buyout could support sales.
A. O. Smith Corporation (AOS - Free Report) is set to release third-quarter 2026 results on Oct. 29, before the opening bell.
The Zacks Consensus Estimate for revenues is pegged at $960 million, which indicates 1.9% growth from the year-ago quarter’s figure. The consensus mark for earnings is pinned at 90 cents per share, which has declined a penny in the past seven days. The estimate indicates a decrease of 4.3% from the figure reported in the year-ago quarter.
The company’s earnings surpassed the Zacks Consensus Estimate thrice and missed once in the trailing four quarters, the average surprise being 2.6%. In the last reported quarter, its earnings of $1.03 per share beat the consensus estimate of 96 cents by 7.3%.
Strong growth in the boiler business and healthy demand for water treatment products in North America are expected to have driven the segment’s performance. However, lower orders for water heaters in the residential market remain concerning for the segment. We expect the segment’s revenues to increase 4.4% from the year-ago quarter to $776 million.
Ongoing challenges in the Chinese real estate market remain a concern for A. O. Smith. Lower volumes of water heaters and water treatment products in the region are expected to have been a spoilsport for the Rest of World segment’s top line. Our estimate for the segment’s revenues is pegged at $193 million, suggesting a decline of 7.2% from the year-ago quarter.
Over time, A. O. Smith’s performance has been negatively impacted by high costs and expenses. Although supply-chain constraints moderated, labor shortages and an increase in material costs are likely to have hurt its margins and profitability.
However, acquisitions made by the company are likely to have contributed to its top line during the quarter. In January 2026, the company completed the acquisition of LVC Holdco LLC (Leonard Valve) for $470 million. The buyout strengthened its water heating and boiler offerings and boosted its presence in the water management market. AOS expects Leonard Valve to contribute approximately $70 million to its sales in 2026.
Earnings Whispers
Our proven model doesn’t conclusively predict 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. That is not the case here, as elaborated below.
Earnings ESP: AOS has an Earnings ESP of -1.85% as the Most Accurate Estimate is pegged at 89 cents per share, which is lower than the Zacks Consensus Estimate of 90 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: A. O. Smith currently carries a Zacks Rank #4 (Sell).
Here are some companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
Emerson Electric Co. (EMR - Free Report) has an Earnings ESP of +0.40% and a Zacks Rank of 2 at present. The company is scheduled to release fourth-quarter fiscal 2026 results on Nov. 4.
Emerson’s earnings beat the Zacks Consensus Estimate twice and matched on the other two occasions of the preceding four quarters, the average surprise being 1.3%.
Caterpillar Inc. (CAT - Free Report) has an Earnings ESP of +2.98% and a Zacks Rank of 2 at present. The company is scheduled to release third-quarter 2026 earnings on Oct. 29, before market open.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 18.1%.
Flowserve Corporation (FLS - Free Report) has an Earnings ESP of +0.51% and a Zacks Rank of 3 at present. The company is scheduled to release third-quarter 2026 earnings on Oct. 28, after market close.
Flowserve’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.2%.
View the Zacks #1 Rank List
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A. O. Smith Gears Up to Report Q3 Earnings: Here's What to Expect
Key Takeaways
A. O. Smith Corporation (AOS - Free Report) is set to release third-quarter 2026 results on Oct. 29, before the opening bell.
The Zacks Consensus Estimate for revenues is pegged at $960 million, which indicates 1.9% growth from the year-ago quarter’s figure. The consensus mark for earnings is pinned at 90 cents per share, which has declined a penny in the past seven days. The estimate indicates a decrease of 4.3% from the figure reported in the year-ago quarter.
The company’s earnings surpassed the Zacks Consensus Estimate thrice and missed once in the trailing four quarters, the average surprise being 2.6%. In the last reported quarter, its earnings of $1.03 per share beat the consensus estimate of 96 cents by 7.3%.
A. O. Smith Corporation Price and EPS Surprise
A. O. Smith Corporation price-eps-surprise | A. O. Smith Corporation Quote
Factors Likely to Influence AOS’ Q3 Results
Strong growth in the boiler business and healthy demand for water treatment products in North America are expected to have driven the segment’s performance. However, lower orders for water heaters in the residential market remain concerning for the segment. We expect the segment’s revenues to increase 4.4% from the year-ago quarter to $776 million.
Ongoing challenges in the Chinese real estate market remain a concern for A. O. Smith. Lower volumes of water heaters and water treatment products in the region are expected to have been a spoilsport for the Rest of World segment’s top line. Our estimate for the segment’s revenues is pegged at $193 million, suggesting a decline of 7.2% from the year-ago quarter.
Over time, A. O. Smith’s performance has been negatively impacted by high costs and expenses. Although supply-chain constraints moderated, labor shortages and an increase in material costs are likely to have hurt its margins and profitability.
However, acquisitions made by the company are likely to have contributed to its top line during the quarter. In January 2026, the company completed the acquisition of LVC Holdco LLC (Leonard Valve) for $470 million. The buyout strengthened its water heating and boiler offerings and boosted its presence in the water management market. AOS expects Leonard Valve to contribute approximately $70 million to its sales in 2026.
Earnings Whispers
Our proven model doesn’t conclusively predict 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. That is not the case here, as elaborated below.
Earnings ESP: AOS has an Earnings ESP of -1.85% as the Most Accurate Estimate is pegged at 89 cents per share, which is lower than the Zacks Consensus Estimate of 90 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: A. O. Smith currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Here are some companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
Emerson Electric Co. (EMR - Free Report) has an Earnings ESP of +0.40% and a Zacks Rank of 2 at present. The company is scheduled to release fourth-quarter fiscal 2026 results on Nov. 4.
Emerson’s earnings beat the Zacks Consensus Estimate twice and matched on the other two occasions of the preceding four quarters, the average surprise being 1.3%.
Caterpillar Inc. (CAT - Free Report) has an Earnings ESP of +2.98% and a Zacks Rank of 2 at present. The company is scheduled to release third-quarter 2026 earnings on Oct. 29, before market open.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 18.1%.
Flowserve Corporation (FLS - Free Report) has an Earnings ESP of +0.51% and a Zacks Rank of 3 at present. The company is scheduled to release third-quarter 2026 earnings on Oct. 28, after market close.
Flowserve’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.2%.