A. O. Smith Q3 revenue flat, misses expectations on China weakness
Overview
U.S. water technology maker's Q3 revenue was flat yr/yr and missed analyst expectations
Adjusted EPS for Q3 beat analyst expectations
Company announced sale of 81% stake in China business, retaining 19% and brand license
Outlook
Company updates 2026 guidance to exclude China business for entire yr
A O Smith sees 2026 net sales excluding China at $3.27 bln-$3.29 bln
Company expects 2026 adjusted EPS excluding China of $3.42-$3.52
Result Drivers
BOILER SALES & ACQUISITION - Co said North America sales rose due to higher boiler volumes, pricing actions and Leonard Valve acquisition, offset by lower residential water heater volumes
CHINA WEAKNESS - Co said Rest of World sales fell due to continued weak consumer demand in China
HIGHER INPUT COSTS - Co said North America margin declined due to lower residential water heater volumes and higher input costs
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Miss | $940.50 mln | $960.23 mln (12 Analysts) |
Q3 Adjusted EPS | Beat | $0.93 | $0.90 (12 Analysts) |
Q3 EPS | $0.93 | ||
Q3 Net Income | $126.30 mln |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 9 "hold" and 2 "sell" or "strong sell"
The average consensus recommendation for the electrical components & equipment peer group is "buy."
Wall Street's median 12-month price target for A. O. Smith Corporation is $67.00, about 10.1% above its October 28 closing price of $60.86
The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 16 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)