Loading...
•
Mar 31, 2023
A O Smith Q1 2023 Earnings Report
A. O. Smith experienced a strong first quarter, driven by resilient water heater demand and lower steel costs.
Key Takeaways
A. O. Smith reported a 1% decrease in sales to $966 million, but net earnings increased by 6% to $126.9 million, resulting in record first quarter EPS of $0.84. Adjusted EPS was $0.94, excluding a non-cash impairment charge. The company raised its 2023 outlook to flat sales and adjusted EPS between $3.30 and $3.50.
Sales decreased 1% to $966 million, with North America increasing 3% and Rest of World decreasing 14%.
Net earnings increased 6% to $126.9 million, with EPS increasing 11% to $0.84.
Adjusted earnings were $142.5 million, excluding a non-cash impairment charge, resulting in adjusted EPS of $0.94.
The company raised its 2023 outlook to flat sales and adjusted EPS between $3.30 and $3.50.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
A. O. Smith projects flat sales and adjusted EPS between $3.30 and $3.50 for the full year 2023.
Positive Outlook
- Strong start to 2023, particularly in North America water heating.
- Outperformed the market in North America water heating.
- Price cost relationship resulted in a strong operating margin.
- China's reopening is progressing as expected with sequential month-over-month demand improvement.
- Strong balance sheet and free cash flow provide liquidity for capital allocation priorities.
Challenges Ahead
- Meaningful rise in steel index prices will translate into higher input costs.
- Higher input costs will put pressure on water heater margins in the second half of the year.
- Potential impacts from future acquisitions are excluded from guidance.
- Further softening in U.S. residential water heater demand.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
Loading earnings performance data...
Loading earnings reaction data...