A. O. Smith Reports Third Quarter Performance
A. O. Smith (NYSE: AOS) reported its third quarter 2024 results with sales of $903 million, a 4% decrease year-over-year, driven by lower sales in China and reduced water heater volumes in North America. Net earnings decreased 11% to $120 million, with diluted earnings per share (EPS) at $0.82, down 9%. The company reaffirmed its revised 2024 EPS outlook of $3.70 to $3.85.
Key highlights include:
- 6% increase in dividend, marking 32 consecutive years of increases
- Pureit acquisition on track to close by end of 2024
- North America segment sales declined 1% to $703.3 million
- Rest of World segment sales decreased 10% to $210.3 million
- Cash and marketable securities totaled $255.6 million as of September 30, 2024
- 2.9 million shares repurchased at a cost of $237.1 million in the first nine months of 2024
A. O. Smith (NYSE: AOS) ha riportato i suoi risultati del terzo trimestre 2024 con vendite di 903 milioni di dollari, registrando un calo del 4% rispetto all'anno precedente, a causa di una diminuzione delle vendite in Cina e di un ridotto volume di scaldabagni in Nord America. Gli utili netti sono scesi dell'11% a 120 milioni di dollari, con un utile per azione diluito (EPS) di 0,82 dollari, in calo del 9%. L'azienda ha confermato le sue stime riviste per l'EPS 2024 di 3,70-3,85 dollari.
I principali risultati includono:
- Aumento del 6% del dividendo, segnando 32 anni consecutivi di aumenti
- Acquisizione di Pureit in procinto di chiudere entro la fine del 2024
- Le vendite nel segmento Nord America sono diminuite dell'1% a 703,3 milioni di dollari
- Le vendite nel segmento Rest of World sono scese del 10% a 210,3 milioni di dollari
- Liquidi e titoli commerciabili ammontavano a 255,6 milioni di dollari al 30 settembre 2024
- 2,9 milioni di azioni riacquistate a un costo di 237,1 milioni di dollari nei primi nove mesi del 2024
A. O. Smith (NYSE: AOS) reportó sus resultados del tercer trimestre de 2024 con ventas de 903 millones de dólares, una disminución del 4% en comparación con el año anterior, impulsada por menores ventas en China y una reducción en los volúmenes de calentadores de agua en América del Norte. Las ganancias netas disminuyeron un 11% a 120 millones de dólares, con ganancias por acción diluidas (EPS) de 0,82 dólares, bajando un 9%. La empresa reafirmó su perspectiva revisada de EPS para 2024 de entre 3,70 y 3,85 dólares.
Los puntos destacados incluyen:
- Aumento del 6% en el dividendo, marcando 32 años consecutivos de aumentos
- La adquisición de Pureit está en camino de cerrarse a finales de 2024
- Las ventas en el segmento de América del Norte disminuyeron un 1% a 703,3 millones de dólares
- Las ventas en el segmento del resto del mundo disminuyeron un 10% a 210,3 millones de dólares
- Efectivo y valores negociables totalizaron 255,6 millones de dólares al 30 de septiembre de 2024
- Se recompraron 2,9 millones de acciones a un costo de 237,1 millones de dólares en los primeros nueve meses de 2024
A. O. Smith (NYSE: AOS)는 2024년 3분기 실적을 발표했으며, 매출은 9억 3백만 달러로 전년 대비 4% 감소했습니다. 이는 중국에서의 매출 감소와 북미에서의 온수기 판매량 감소에 의해 촉발되었습니다. 순이익은 11% 감소한 1억 2천만 달러로, 희석 주당 순이익 (EPS)은 0.82달러로 9% 하락했습니다. 이 회사는 2024년 EPS 전망을 3.70에서 3.85달러로 수정해 재확인했습니다.
주요 하이라이트는 다음과 같습니다:
- 6%의 배당금 인상, 32년 연속 인상 기록
- Pureit 인수는 2024년 말까지 완료될 예정
- 북미 세그먼트 매출은 1% 감소하여 7억 3천3백만 달러
- 세계 기타 세그먼트 매출은 10% 감소하여 2억 1천3백만 달러
- 현금 및 유가증권 총액은 2024년 9월 30일 기준으로 2억 5천5백6십만 달러
- 2024년 첫 9개월 동안 2.9백만 주를 2억 3천7백1십만 달러에 재매입함
A. O. Smith (NYSE: AOS) a annoncé ses résultats du troisième trimestre 2024 avec des ventes de 903 millions de dollars, une diminution de 4% par rapport à l'année précédente, en raison de la baisse des ventes en Chine et d'une réduction des volumes de chauffe-eau en Amérique du Nord. Le bénéfice net a diminué de 11% pour atteindre 120 millions de dollars, avec un bénéfice par action dilué (EPS) de 0,82 dollar, en baisse de 9%. L'entreprise a réaffirmé ses prévisions révisées d'EPS pour 2024 se chiffrant entre 3,70 et 3,85 dollars.
Les points clés incluent :
- Augmentation de 6% du dividende, marquant 32 années consécutives d'augmentations
- Acquisition de Pureit prévue pour finaliser d'ici la fin de 2024
- Les ventes dans le segment Amérique du Nord ont diminué de 1% pour atteindre 703,3 millions de dollars
- Les ventes dans le segment Reste du monde ont diminué de 10% pour atteindre 210,3 millions de dollars
- Les liquidités et titres négociables totalisaient 255,6 millions de dollars au 30 septembre 2024
- Achat de 2,9 millions d'actions pour un coût de 237,1 millions de dollars au cours des neuf premiers mois de 2024
A. O. Smith (NYSE: AOS) hat die Ergebnisse des dritten Quartals 2024 veröffentlicht, mit einem Umsatz von 903 Millionen Dollar, was einem Rückgang von 4% im Vergleich zum Vorjahr entspricht, bedingt durch niedrigere Verkaufszahlen in China und reduzierte Verkaufszahlen von Wasserheizern in Nordamerika. Der Nettogewinn sank um 11% auf 120 Millionen Dollar, während der verwässerte Gewinn pro Aktie (EPS) bei 0,82 Dollar lag, was einen Rückgang von 9% bedeutet. Das Unternehmen bestätigte seine überarbeitete EPS-Prognose für 2024 von 3,70 bis 3,85 Dollar.
Wichtige Highlights sind:
- 6% Erhöhung der Dividende, was 32 aufeinanderfolgende Jahre von Erhöhungen markiert
- Die Akquisition von Pureit steht kurz vor dem Abschluss bis Ende 2024
- Die Umsätze im Segment Nordamerika sanken um 1% auf 703,3 Millionen Dollar
- Die Umsätze im Segment Rest der Welt gingen um 10% auf 210,3 Millionen Dollar zurück
- Der Bargeldbestand und die handelbaren Wertpapiere beliefen sich zum 30. September 2024 auf 255,6 Millionen Dollar
- In den ersten neun Monaten von 2024 wurden 2,9 Millionen Aktien zu einem Preis von 237,1 Millionen Dollar zurückgekauft
- 6% increase in dividend, marking 32 consecutive years of increases
- Pureit acquisition on track to close by end of 2024
- Double-digit sales growth in commercial boilers and North America water treatment
- India sales increased 12% year-over-year in local currency
- Cash provided by operations was $359.9 million in the first nine months of 2024
- Sales decreased 4% to $903 million
- Net earnings decreased 11% to $120 million
- Diluted earnings per share (EPS) decreased 9% to $0.82
- North America segment sales declined 1% due to lower water heater volumes
- Rest of World segment sales decreased 10%, with China local currency sales down 17%
- Segment earnings and margins declined in both North America and Rest of World segments
- Free cash flow decreased year-over-year due to higher inventories and lower trade receivable balances
Insights
A. O. Smith's Q3 2024 results show mixed performance with some concerning trends. Sales decreased by 4% to
The company's North America segment saw a 1% decline in sales, while the Rest of World segment, particularly China, experienced a more significant 10% drop. These results reflect ongoing consumer demand challenges in China and softness in North American water heater markets.
Despite these headwinds, there are some positive notes. The company maintained a strong balance sheet with
Investors should monitor the company's ability to navigate ongoing market challenges, particularly in China and its efforts to improve production efficiencies in North America.
A. O. Smith's Q3 results reflect broader market trends and regional economic conditions. The 17% decrease in local currency sales in China underscores the persistent weakness in Chinese consumer demand, a trend affecting many multinational companies. This contrasts with India's 12% year-over-year growth in local currency, highlighting the divergent performance in emerging markets.
In North America, the decline in residential and commercial water heater volumes suggests a potential slowdown in the housing and construction sectors. However, the double-digit growth in commercial boilers and water treatment indicates some resilience in specific product categories.
The company's inventory management and cash flow generation (
Looking ahead, A. O. Smith's cautious outlook for the remainder of 2024 aligns with broader economic uncertainties, particularly in key markets like China and North America.
Third Quarter 2024 Highlights
(Comparisons are year-over-year ("YoY"), unless otherwise noted)
- Sales of
, a decrease of$903 million 4% , driven by lower sales inChina and lower volumes of water heaters inNorth America - Net earnings of
, a decrease of$120 million 11% - Diluted earnings per share (EPS) of
, a decrease of$0.82 9% - Reaffirm revised 2024 EPS outlook of
to$3.70 $3.85 6% increase to our dividend; we have increased our dividend for 32 consecutive years- Recently announced Pureit acquisition on track to close by the end of 2024
Key Financial Metrics
Third Quarter
(in millions, except per share amounts)
Q3 2024 | Q3 2023 | % Change YoY | |
Net sales | -4 % | ||
Net earnings | -11 % | ||
Diluted earnings per share | $ 0.82 | $ 0.90 | -9 % |
"As we announced in our October 11 press release, our
Third Quarter 2024 Segment-level Performance
2024 sales of
Segment earnings were
Rest of World
Sales of
Segment earnings were
Balance Sheet, Liquidity and Capital Allocation
As of September 30, 2024, cash and marketable securities balances totaled
Cash provided by operations was
As previously announced, the Company signed an agreement earlier this year to acquire Pureit from Unilever for
As part of its commitment to return capital to shareholders, the Company repurchased 2.9 million shares at a cost of
On Oct. 7, the Company's board of directors approved a
Outlook
2024 Outlook
(in millions except per share amounts)
2023 | 2024 Outlook | |||
Actual | Low End | High End | ||
Net sales | $ 3,853 | |||
Diluted earnings per share | $ 3.69 | $ 3.70 | $ 3.85 | |
Adjusted earnings per share | $ 3.811 | $ 3.70 | $ 3.85 |
1 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations |
"Because we expect consumer demand to remain challenged in
The Company's guidance excludes the potential impacts from future acquisitions.
A. O. Smith will host a webcasted conference call at 10:00 a.m. (Eastern Daylight Time) today. The call can be heard live on the Company's website (click here). An audio replay of the call will be available on the Company's website after the live event. To access the archived audio replay, go to the "Investors" page and select the Third Quarter 2024 Earnings Call link.
To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. Adjusted earnings, adjusted EPS, adjusted segment earnings and adjusted corporate expenses exclude the impact of pension settlement income and impairment expenses. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release.
Forward-looking Statements
This release contains statements that the Company believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "forecast," "continue," "guidance," "outlook" or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: further softening in
About A. O. Smith
Celebrating its 150th year of business, A. O. Smith Corporation, with headquarters in
SOURCE: A. O. Smith Corporation
A. O. SMITH CORPORATION | |||||||||||
Condensed Consolidated Statement of Earnings | |||||||||||
(dollars in millions, except share data) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
Net sales | $ | 902.6 | $ | 937.5 | $ | 2,905.7 | $ | 2,864.7 | |||
Cost of products sold | 565.3 | 581.3 | 1,787.7 | 1,749.7 | |||||||
Gross profit | 337.3 | 356.2 | 1,118.0 | 1,115.0 | |||||||
Selling, general and administrative expenses | 176.6 | 174.9 | 557.3 | 542.4 | |||||||
Impairment expense | — | — | — | 15.6 | |||||||
Interest expense | 1.5 | 2.4 | 4.3 | 10.9 | |||||||
Other expense (income), net | 2.6 | 2.5 | 0.5 | (10.5) | |||||||
Earnings before provision for income taxes | 156.6 | 176.4 | 555.9 | 556.6 | |||||||
Provision for income taxes | 36.5 | 41.0 | 132.0 | 137.3 | |||||||
Net earnings | $ | 120.1 | $ | 135.4 | $ | 423.9 | $ | 419.3 | |||
Diluted earnings per share of common stock(1) | $ | 0.82 | $ | 0.90 | $ | 2.87 | $ | 2.77 | |||
Average common shares outstanding (000's omitted) | 146,700 | 151,210 | 147,529 | 151,548 |
(1) | Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. |
A. O. SMITH CORPORATION | |||||
Condensed Consolidated Balance Sheet | |||||
(dollars in millions) | |||||
(Unaudited) | December 31, | ||||
ASSETS: | |||||
Cash and cash equivalents | $ | 219.3 | $ | 339.9 | |
Marketable securities | 36.3 | 23.5 | |||
Receivables | 558.2 | 596.0 | |||
Inventories | 554.9 | 497.4 | |||
Other current assets | 43.8 | 43.5 | |||
Total Current Assets | 1,412.5 | 1,500.3 | |||
Net property, plant and equipment | 624.6 | 597.5 | |||
Goodwill and other intangibles | 978.9 | 970.1 | |||
Operating lease assets | 32.4 | 37.3 | |||
Other assets | 105.8 | 108.7 | |||
Total Assets | $ | 3,154.2 | $ | 3,213.9 | |
LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||
Trade payables | $ | 555.9 | $ | 600.4 | |
Accrued payroll and benefits | 71.5 | 92.2 | |||
Accrued liabilities | 144.1 | 177.4 | |||
Product warranties | 62.7 | 65.3 | |||
Debt due within one year | 10.0 | 10.0 | |||
Total Current Liabilities | 844.2 | 945.3 | |||
Long-term debt | 109.7 | 117.3 | |||
Operating lease liabilities | 23.5 | 27.9 | |||
Other liabilities | 260.1 | 279.0 | |||
Stockholders' equity | 1,916.7 | 1,844.4 | |||
Total Liabilities and Stockholders' Equity | $ | 3,154.2 | $ | 3,213.9 |
A. O. SMITH CORPORATION | |||||
Condensed Consolidated Statement of Cash Flows | |||||
(dollars in millions) | |||||
(unaudited) | |||||
Nine Months Ended | |||||
2024 | 2023 | ||||
Operating Activities | |||||
Net earnings | $ | 423.9 | $ | 419.3 | |
Adjustments to reconcile net earnings to net cash provided by (used in) operating | |||||
Depreciation & amortization | 59.5 | 57.5 | |||
Stock based compensation expense | 12.7 | 10.1 | |||
Deferred income taxes | (0.9) | — | |||
Non-cash impairment | — | 15.6 | |||
Pension settlement income | — | (6.0) | |||
Pension settlement income non-cash taxes | — | 1.5 | |||
Net changes in operating assets and liabilities: | |||||
Current assets and liabilities | (121.3) | (44.6) | |||
Noncurrent assets and liabilities | (14.0) | (14.4) | |||
Cash Provided by Operating Activities | 359.9 | 439.0 | |||
Investing Activities | |||||
Capital expenditures | (77.4) | (42.7) | |||
Acquisitions | (21.3) | (16.1) | |||
Investment in marketable securities | (72.9) | (63.1) | |||
Net proceeds from sale of marketable securities | 60.5 | 91.1 | |||
Cash Used in Investing Activities | (111.1) | (30.8) | |||
Financing Activities | |||||
Long-term debt repaid | (6.9) | (214.9) | |||
Common stock repurchases | (237.1) | (161.4) | |||
Net proceeds from stock option activity | 17.2 | 11.3 | |||
Dividends paid | (140.9) | (135.7) | |||
Cash Used in Financing Activities | (367.7) | (500.7) | |||
Effect of exchange rate changes on cash and cash equivalents | (1.7) | (17.7) | |||
Net decrease in cash and cash equivalents | (120.6) | (110.2) | |||
Cash and cash equivalents - beginning of period | 339.9 | 391.2 | |||
Cash and Cash Equivalents - End of Period | $ | 219.3 | $ | 281.0 |
A. O. SMITH CORPORATION | |||||||||||
Business Segments | |||||||||||
(dollars in millions) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
Net sales | |||||||||||
$ | 703.3 | $ | 709.9 | $ | 2,260.3 | $ | 2,184.9 | ||||
Rest of World | 210.3 | 233.4 | 682.0 | 696.7 | |||||||
Inter-segment sales | (11.0) | (5.8) | (36.6) | (16.9) | |||||||
$ | 902.6 | $ | 937.5 | $ | 2,905.7 | $ | 2,864.7 | ||||
Earnings | |||||||||||
$ | 162.5 | $ | 170.0 | $ | 559.6 | $ | 557.7 | ||||
Rest of World(2) | 13.6 | 23.2 | 56.7 | 56.8 | |||||||
Inter-segment earnings elimination | — | — | (0.4) | — | |||||||
176.1 | 193.2 | 615.9 | 614.5 | ||||||||
Corporate expense(3) | (18.0) | (14.4) | (55.7) | (47.0) | |||||||
Interest expense | (1.5) | (2.4) | (4.3) | (10.9) | |||||||
Earnings before income taxes | 156.6 | 176.4 | 555.9 | 556.6 | |||||||
Provision for income taxes | 36.5 | 41.0 | 132.0 | 137.3 | |||||||
Net earnings | $ | 120.1 | $ | 135.4 | $ | 423.9 | $ | 419.3 | |||
Additional Information | |||||||||||
(1) Adjustments: | |||||||||||
includes pension settlement income of: | $ | — | $ | — | $ | — | $ | (5.0) | |||
(2) Adjustments: Rest of World | |||||||||||
includes impairment expense of: | — | — | — | 12.5 | |||||||
(3) Adjustments: Corporate expense | |||||||||||
includes pension settlement income of: | — | — | — | (1.0) | |||||||
includes impairment expense of: | — | — | — | 3.1 |
A. O. SMITH CORPORATION | |||||||||||
Adjusted Earnings and Adjusted Earnings Per Share | |||||||||||
(dollars in millions, except per share data) | |||||||||||
(unaudited) | |||||||||||
The following is a reconciliation of net earnings and diluted earnings per share to adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP): | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
Net Earnings (GAAP) | $ | 120.1 | $ | 135.4 | $ | 423.9 | $ | 419.3 | |||
Impairment expense, before tax | — | — | — | 15.6 | |||||||
Pension settlement income, before tax | — | — | — | (6.0) | |||||||
Tax effect on above items | — | — | — | 1.5 | |||||||
Adjusted Earnings (non-GAAP) | $ | 120.1 | $ | 135.4 | $ | 423.9 | $ | 430.4 | |||
Diluted Earnings Per Share (GAAP)(1) | $ | 0.82 | $ | 0.90 | $ | 2.87 | $ | 2.77 | |||
Impairment expense per diluted share, before tax | — | — | — | 0.10 | |||||||
Pension settlement income per diluted share, before tax | — | — | — | (0.04) | |||||||
Tax effect on above items per diluted share | — | — | — | 0.01 | |||||||
Adjusted Earnings Per Share (non-GAAP)(1) | $ | 0.82 | $ | 0.90 | $ | 2.87 | $ | 2.84 |
(1) | Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. |
A. O. SMITH CORPORATION | |||||||||||
Adjusted Segment Earnings | |||||||||||
(dollars in millions) | |||||||||||
(unaudited) | |||||||||||
The following is a reconciliation of reported earnings before provision for income taxes to total segment earnings (non-GAAP) and adjusted segment earnings (non-GAAP): | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
Earnings Before Provision for Income Taxes (GAAP) | $ | 156.6 | $ | 176.4 | $ | 555.9 | $ | 556.6 | |||
Add: Corporate expense(1) | 18.0 | 14.4 | 55.7 | 47.0 | |||||||
Add: Interest expense | 1.5 | 2.4 | 4.3 | 10.9 | |||||||
Total Segment Earnings (non-GAAP) | $ | 176.1 | $ | 193.2 | $ | 615.9 | $ | 614.5 | |||
$ | 162.5 | $ | 170.0 | $ | 559.6 | $ | 557.7 | ||||
Rest of World(3) | 13.6 | 23.2 | 56.7 | 56.8 | |||||||
Inter-segment earnings elimination | — | — | (0.4) | — | |||||||
Total Segment Earnings (non-GAAP) | $ | 176.1 | $ | 193.2 | $ | 615.9 | $ | 614.5 | |||
Additional Information | |||||||||||
(1)Corporate expense | $ | (18.0) | $ | (14.4) | $ | (55.7) | $ | (47.0) | |||
Pension settlement income, before tax | — | — | — | (1.0) | |||||||
Impairment expense, before tax | — | — | — | 3.1 | |||||||
Adjusted Corporate expense (non-GAAP) | $ | (18.0) | $ | (14.4) | $ | (55.7) | $ | (44.9) | |||
(2) | $ | 162.5 | $ | 170.0 | $ | 559.6 | $ | 557.7 | |||
Pension settlement income, before tax | — | — | — | (5.0) | |||||||
Adjusted | $ | 162.5 | $ | 170.0 | $ | 559.6 | $ | 552.7 | |||
(3)Rest of World | $ | 13.6 | $ | 23.2 | $ | 56.7 | $ | 56.8 | |||
Impairment expense, before tax | — | — | — | 12.5 | |||||||
Adjusted Rest of World (non-GAAP) | $ | 13.6 | $ | 23.2 | $ | 56.7 | $ | 69.3 |
A. O. SMITH CORPORATION | |||||
Free Cash Flow | |||||
(dollars in millions) | |||||
(unaudited)
| |||||
The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP): | |||||
Nine Months Ended September 30, | |||||
2024 | 2023 | ||||
Cash provided by operating activities (GAAP) | $ | 359.9 | $ | 439.0 | |
Less: Capital expenditures | (77.4) | (42.7) | |||
Free cash flow (non-GAAP) | $ | 282.5 | $ | 396.3 |
A. O. SMITH CORPORATION | ||||||
2024 EPS Guidance and 2023 Adjusted EPS | ||||||
(unaudited) | ||||||
The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax): | ||||||
2024 Guidance | 2023 | |||||
Diluted EPS (GAAP) | $ | 3.70 - 3.85 | $ | 3.69 | ||
Restructuring and impairment expense | — | 0.12 | (1) | |||
Adjusted EPS (non-GAAP) | $ | 3.70 - 3.85 | $ | 3.81 |
(1) | Includes pre-tax restructuring and impairment expenses of |
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SOURCE A. O. Smith Corporation
FAQ
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