A. O. Smith Corporation Prepares to Announce Q4 Earnings Amid Mixed Performance
A. O. Smith Corporation (AOS), based in Milwaukee, Wisconsin, is a leader in manufacturing residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products. The company boasts a market capitalization of $10 billion and focuses on innovative and energy-efficient solutions, selling its products globally. AOS is set to release its fiscal fourth-quarter earnings for 2024 before the markets open on Thursday, Jan. 30.
Before the earnings announcement, analysts project AOS will report earnings of $0.90 per share on a diluted basis, a decrease of 7.2% from $0.97 per share in the same quarter last year. In the past year, AOS has met or beaten consensus estimates in three of the last four quarters, while it missed forecasts once.
Annual Earnings Outlook
Looking at the full year, analysts expect AOS to post earnings per share (EPS) of $3.77, down 1.1% from $3.81 recorded in fiscal 2023. However, they forecast a rebound in EPS, predicting a rise of 6.9% to $4.03 for fiscal 2025.
Stock Performance Compared to the Market
AOS shares have struggled, declining 13.4% over the past year, while the S&P 500 index gained 24.4%. The company’s stock also underperformed compared to the Industrial Select Sector SPDR Fund’s (XLI) increase of 18.4% in the same period.
Challenges Facing A. O. Smith
The company’s recent struggles stem from weaknesses in regions like North America and the Rest of the World. Lower sales volumes of water heaters and treatment products in China, alongside declining orders domestically, have hurt performance. Rising costs for materials and labor have further squeezed AOS’s profits.
Q3 Earnings Report and Analyst Sentiment
On Oct. 22, after announcing its Q3 results, AOS shares dropped slightly. The company reported an EPS of $0.82, matching Wall Street expectations, with revenue reaching $902.6 million, surpassing the forecast of $901.6 million. For the full year, AOS anticipates EPS between $3.70 and $3.85 and expects revenue to fall between $3.8 billion and $3.9 billion.
Analysts maintain a cautious stance on AOS stock, assigning it a “Hold” rating overall. Among 11 analysts, two suggest a “Strong Buy,” eight recommend a “Hold,” and one rates it as a “Strong Sell.” The average price target set by analysts for AOS is $81.88, indicating a potential upside of 19.2% from its current price.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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