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A. O. Smith Reports Third Quarter Performance

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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
Positive
  • 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
Negative
  • 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 $902.6 million, primarily due to lower sales in China and reduced water heater volumes in North America. Net earnings fell 11% to $120.2 million, with diluted EPS dropping 9% to $0.82.

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 $255.6 million in cash and marketable securities. The upcoming Pureit acquisition and a 6% dividend increase demonstrate confidence in long-term prospects. However, the revised 2024 EPS outlook of $3.70 to $3.85 suggests caution for the near term.

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 ($282.5 million free cash flow in the first nine months) demonstrate operational efficiency despite challenges. The ongoing share repurchase program ($237.1 million year-to-date) and dividend increase signal management's commitment to shareholder returns.

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 $903 million, a decrease of 4%, driven by lower sales in China and lower volumes of water heaters in North America
  • Net earnings of $120 million, a decrease of 11%
  • Diluted earnings per share (EPS) of $0.82, a decrease of 9% 
  • Reaffirm revised 2024 EPS outlook of $3.70 to $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

MILWAUKEE, Oct. 22, 2024 /PRNewswire/ -- Global water technology company A. O. Smith Corporation ("the Company") (NYSE: AOS) today announced its third quarter 2024 results.

Key Financial Metrics

Third Quarter

(in millions, except per share amounts)


             Q3 2024

  Q3 2023

% Change YoY

Net sales

$902.6

$ 937.5

-4 %

Net earnings

$120.2

$ 135.4

-11 %

Diluted earnings per share

$  0.82

$   0.90

-9 %

"As we announced in our October 11 press release, our China sales and North America water heater volumes were lower than we expected in the third quarter. Consumer demand headwinds in China and pre-buy and lead-time-driven order demand softness in North America persisted through the quarter and led to lower than expected sales and profitability," noted Kevin J. Wheeler, chairman and chief executive officer. "While our China and North America water heater businesses were challenged in the quarter, I am pleased with the performance of other parts of our business, particularly the double-digit sales growth in commercial boilers and North America water treatment."

Third Quarter 2024 Segment-level Performance

North America

2024 sales of $703.3 million declined 1% compared to 2023 as higher boiler and water treatment sales and pricing action benefits were more than offset by lower residential and commercial water heater volumes. 

Segment earnings were $162.5 million and segment margin was 23.1% in 2024 compared to segment earnings of $170.0 million and segment margin of 23.9% in 2023. The year-over-year decreases in segment earnings and segment margin were largely a result of lower water heater volumes more than offsetting higher volumes of boilers and water treatment products and pricing actions.

Rest of World

Sales of $210.3 million declined 10% compared with prior year sales of $233.4 million. Local currency third-party sales in China decreased 17% in 2024, as weak consumer demand resulted in lower volumes of our core water heater and water treatment products. Sales in India increased 12% year-over-year in local currency in 2024 as new products continued to drive growth. 

Segment earnings were $13.6 million and segment margin was 6.5% in 2024 compared to segment earnings of $23.2 million and segment margin of 9.9% in the prior year. The year-over-year declines in segment earnings and segment margin were primarily due to lower volumes that were partially offset by lower materials costs that resulted from cost savings projects in China.

Balance Sheet, Liquidity and Capital Allocation

As of September 30, 2024, cash and marketable securities balances totaled $255.6 million and debt totaled $119.7 million, resulting in a leverage ratio of 5.9% as measured by total debt-to-total capitalization.

Cash provided by operations was $359.9 million and free cash flow was $282.5 million in the first nine months of 2024, which decreased year-over-year primarily as a result of higher inventories, higher incentive payments associated with record sales and profits earned in 2023, as well as lower trade receivable balances.

As previously announced, the Company signed an agreement earlier this year to acquire Pureit from Unilever for $120 million, subject to customary adjustments. For the full release, click here. Our acquisition of Pureit is on track to close by the end of 2024.

As part of its commitment to return capital to shareholders, the Company repurchased 2.9 million shares at a cost of $237.1 million in the first nine months of 2024. As of September 30, 2024, authority remained to repurchase approximately 2.7 million additional shares. The Company expects to spend approximately $300 million repurchasing shares in 2024.

On Oct. 7, the Company's board of directors approved a 6% increase in the dividend rate, resulting in a five-year compound annual dividend growth rate of 8%. For the full release, click here

Outlook

2024 Outlook

(in millions except per share amounts)


2023


2024 Outlook


Actual


Low End

High End

Net sales

$   3,853


$ 3,800

$ 3,900

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 China through the end of the year and we are cautious about North America residential and commercial water heater end-market demand, we announced on October 11, and reaffirm today, that we lowered our sales outlook for 2024 to be approximately flat to last year. We also lowered our full year EPS outlook to a range of between $3.70 and $3.85, a year-over-year decline of 1% over 2023 adjusted EPS, at the midpoint," stated Wheeler. "Our improved lead times are expected to continue through the remainder of the year, and we have adjusted our North America residential and commercial water heater facilities to improve production efficiencies at lower levels."

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 U.S. residential and commercial water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company's ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company's products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in North American residential or commercial construction or instability in the Company's replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; negative impact to the Company's businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine, the Middle East and attacks on commercial shipping vessels in the Red Sea; potential further weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company's inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; the possibility that the parties will fail to obtain necessary regulatory approvals or to satisfy any of the other conditions to the proposed acquisition; failure to realize the expected benefits of acquisitions or expected synergies; failure to realize the expected benefits, timing and extent, of regulatory changes; competitive pressures on the Company's businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company's filings with Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2023, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements.

About A. O. Smith

Celebrating its 150th year of business, A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world's leading manufacturers of residential and commercial water heating equipment and boilers, as well as water treatment products. For more information, visit www.aosmith.com

SOURCE: A. O. Smith Corporation

 

A. O. SMITH CORPORATION

Condensed Consolidated Statement of Earnings

(dollars in millions, except share data)

(unaudited)



Three Months Ended
September 30,


Nine Months Ended
September 30,


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)
September 30,
2024


December 31,
2023

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
September 30,


2024


2023

Operating Activities






Net earnings

$

423.9


$

419.3

Adjustments to reconcile net earnings to net cash provided by (used in) operating
activities:






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












North America

$

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












North America(1)

$

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: North America












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













North America(2)

$

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)North America

$

162.5


$

170.0


$

559.6


$

557.7

Pension settlement income, before tax








(5.0)

Adjusted North America (non-GAAP)

$

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 $15.7 million and $3.1 million, within the Rest of World segment and Corporate expenses, respectively.

 

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SOURCE A. O. Smith Corporation

FAQ

What were A. O. Smith's (AOS) Q3 2024 sales and earnings?

A. O. Smith (AOS) reported Q3 2024 sales of $903 million, a 4% decrease year-over-year. Net earnings were $120 million, down 11%, with diluted earnings per share (EPS) at $0.82, a 9% decrease.

How did A. O. Smith's (AOS) North America segment perform in Q3 2024?

A. O. Smith's (AOS) North America segment sales declined 1% to $703.3 million in Q3 2024. Segment earnings were $162.5 million with a margin of 23.1%, down from $170.0 million and 23.9% margin in Q3 2023.

What was A. O. Smith's (AOS) performance in China for Q3 2024?

A. O. Smith's (AOS) local currency third-party sales in China decreased 17% in Q3 2024 due to weak consumer demand, resulting in lower volumes of core water heater and water treatment products.

Did A. O. Smith (AOS) update its 2024 outlook?

Yes, A. O. Smith (AOS) reaffirmed its revised 2024 EPS outlook of $3.70 to $3.85, which represents a year-over-year decline of 1% over 2023 adjusted EPS at the midpoint.

How much did A. O. Smith (AOS) spend on share repurchases in 2024 so far?

A. O. Smith (AOS) repurchased 2.9 million shares at a cost of $237.1 million in the first nine months of 2024 and expects to spend approximately $300 million repurchasing shares in 2024.

A.O. Smith Corporation

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