What You Need To Know Ahead of A. O. Smith's Earnings Release

With a market cap of $9 billion, A. O. Smith Corporation (AOS) is a global leader in manufacturing and marketing residential and commercial water heating and water treatment products. It operates through North America and Rest of World segments, offering brands like A. O. Smith, State, Lochinvar, and Aquasana across wholesale, retail, and e-commerce channels. The Milwaukee, Wisconsin-based company is expected to release its fiscal Q1 2025 earnings results before the market opens on Tuesday, Apr. 29.

Ahead of this event, analysts project the water heaters and boilers maker to report an adjusted EPS of $0.90, a 10% decrease from $1 in the year-ago quarter. The company has exceeded or met Wall Street's bottom-line estimates in two of the last four quarters while missing on two other occasions. In Q4 2024, AOS missed the consensus adjusted EPS estimate by 4.5%.

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For fiscal 2025, analysts forecast A. O. Smith to report adjusted EPS of $3.76, up marginally from $3.73 in fiscal 2024. Moreover, adjusted EPS is expected to grow 11.7% year-over-year to $4.20 in fiscal 2026.

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Over the past 52 weeks, A. O. Smith has dropped 26.5%, underperforming the broader S&P 500 Index's ($SPX) 2.1% rise and the Industrial Select Sector SPDR Fund's (XLI) marginal dip over the same period. 

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Shares of A.O. Smith fell 2.8% on Jan. 30 after it reported Q4 2024 adjusted EPS of $0.85 and revenue of $912.4 million, missing the estimates. Year-over-year, adjusted EPS dropped 12.4%, and revenue declined 7.7%. North America sales fell 7.7% due to lower water heater volumes, while revenue in the Rest of World segment dropped 4%, mainly from weak demand in China. Management’s 2025 guidance of EPS between $3.60 and $3.90, along with expectations of continued sales declines in China, added to investor concerns.

Analysts' consensus view on A. O. Smith stock is cautious, with a "Hold" rating overall. Among 11 analysts covering the stock, three suggest a "Strong Buy," seven give a "Hold," and one provides a "Strong Sell" rating. This configuration is slightly more bullish than three months ago, with two analysts suggesting a "Strong Buy." 

As of writing, AOS is trading below the average analyst price target of $74.56.