Loading...
•
Sep 30, 2023
A O Smith Q3 2023 Earnings Report
A. O. Smith delivered strong Q3 2023 results, driven by North America segment and China's new products.
Key Takeaways
A. O. Smith reported a strong third quarter with EPS of $0.90. The North America segment performed particularly well, with resilient demand for residential water heaters and improved operating margin. China's new kitchen appliance products drove year-over-year improvement, despite a challenging economic backdrop. India experienced sales growth of 17% in local currency, and the company acquired Water Tec to expand its water treatment business in the U.S.
North America water heater sales increased 13% due to strength in residential water heater demand.
China's third quarter sales increased 9% in local currency, driven by newly introduced dishwasher and steam oven products.
India delivered year-to-date sales growth of 17% in local currency with new product introductions.
Company acquired Water Tec, an Arizona-based water treatment company.
A O Smith
A O Smith
A O Smith Revenue by Segment
A O Smith Revenue by Geographic Location
Revenue by Segment
North America Revenue
CapyFin.comRest of World Revenue
CapyFin.comRevenue by Geographic Location
North America Revenue
CapyFin.com Forward Guidance
A. O. Smith increased its 2023 outlook with an expected adjusted earnings per share range of $3.70 to $3.80. Sales are expected to grow approximately 2% compared to 2022. North America full year margin guidance is approximately 25%, and Rest of the World margin guidance remains unchanged at approximately 10%. Strong free cash flow is expected between $575 million and $600 million.
Positive Outlook
- Residential water heater orders remained strong through October.
- 2023 residential water heater industry volumes will increase approximately 4% compared to last year.
- Demand for commercial electric water heaters greater than 55-gallon continue to be robust.
- Sales in China will grow 2% to 5% local currency in 2023.
- Sales in India will grow 15% this year.
Challenges Ahead
- Stable supply chain with limited disruption
- Q4 material costs will be similar to Q3 material costs.
- CapEx should be approximately $65 million
- Corporate and other expenses are expected to be approximately $60 million.
- Effective tax rate is estimated to be approximately 24%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income