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Dec 31, 2022
A O Smith Q4 2022 Earnings Report
A. O. Smith reported a net loss but achieved record sales for the year, driven by pricing actions and boiler demand, offset by U.S. water heater destocking.
Key Takeaways
A. O. Smith reported a net loss for Q4 2022, with a significant decrease in net earnings compared to Q4 2021. However, the company achieved record sales for the full year 2022. The Q4 results were impacted by a non-cash pension settlement expense. The company introduces 2023 guidance with sales flat to 2022 and EPS between $3.15 and $3.45.
Net sales decreased by 6% year-over-year to $936.1 million.
Net loss was $(120.1) million, a decrease of 186% year-over-year.
Adjusted earnings decreased by 4% year-over-year to $131.6 million.
Adjusted EPS increased by 1% year-over-year to $0.86.
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
The company projects sales to be flat year-over-year, +/- 3%. Anticipates improved profitability as input costs moderate and expects full year EPS to be between $3.15 and $3.45, a 5% year-over-year increase at the mid-point.
Positive Outlook
- Inventory adjustments in the wholesale residential market largely behind us.
- Mindful of headwinds in new home construction, which remains in a deficit position.
- Lifting of certain COVID-19-related restrictions is a positive step to an improved economic environment in China.
- Strong balance sheet and free cash flow.
- Focus on capital allocation priorities of organic growth, dividends, acquisitions, and share repurchases.
Challenges Ahead
- Headwinds in new home construction.
- Impacts from COVID-19-related restrictions on consumer demand in China.
- Potential impacts from future acquisitions are excluded.
- Assumes the COVID-19-related impacts in China improve in the second half of the year and do not significantly impact our operations or our employees, customers or suppliers.
- Softening in U.S. residential water heater demand.
Revenue & Expenses
Visualization of income flow from segment revenue to net income