A. O. Smith (NYSE:AOS) Releases Earnings Results, Misses Estimates By $0.09 EPS

A. O. Smith (NYSE:AOS) announced its quarterly earnings data on Thursday. The industrial products company reported $0.85 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.94 by ($0.09), FiscalAI reports. The company had revenue of $945.60 million for the quarter, compared to the consensus estimate of $974.06 million. A. O. Smith had a net margin of 14.26% and a return on equity of 29.51%. The firm’s quarterly revenue was down 1.9% compared to the same quarter last year. During the same period last year, the business posted $0.95 earnings per share. A. O. Smith updated its FY 2026 guidance to 3.600-3.900 EPS.

Here are the key takeaways from A. O. Smith’s conference call:

• Q1 results showed total company sales down 2% to $946 million and EPS of $0.85, an 11% decline driven by lower volumes and transaction-related expenses from the Leonard Valve acquisition.
• China demand remains weak—Q1 sales fell ~17% in local currency and management now expects China sales down low-double-digits in 2026 (Q2 ~15% softer), with a strategic assessment delaying recovery timing.
• 2026 guidance was revised to an adjusted EPS range of $3.70–$4.00, with key headwinds including a ~15% steel cost increase assumption, ~3% higher total COGS from freight/non-steel materials/tariffs, and a ~$20 million North America water treatment restructuring charge expected in Q2.
• Strong liquidity and capital returns—first-quarter free cash flow was $119 million, cash was $204 million, the company repurchased $51 million of stock in Q1 and expects to repurchase ~$200 million in 2026, while the board approved a $0.36 quarterly dividend.
• The Leonard Valve acquisition contributed $66 million in Q1, management says integration is on track with robust valve growth and expects Leonard to deliver another year of double-digit sales growth (~$70 million contribution in 2026).

A. O. Smith Stock Down 2.4%

AOS traded down $1.48 on Friday, hitting $60.36. The company had a trading volume of 1,238,776 shares, compared to its average volume of 1,476,301. The company has a debt-to-equity ratio of 0.06, a current ratio of 1.50 and a quick ratio of 0.94. A. O. Smith has a 52-week low of $59.83 and a 52-week high of $81.86. The stock has a fifty day simple moving average of $67.68 and a 200-day simple moving average of $68.96. The firm has a market capitalization of $8.35 billion, a P/E ratio of 15.62, a P/E/G ratio of 1.33 and a beta of 1.35.

A. O. Smith Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, May 15th. Shareholders of record on Thursday, April 30th will be issued a $0.36 dividend. The ex-dividend date is Thursday, April 30th. This represents a $1.44 annualized dividend and a yield of 2.4%. A. O. Smith’s dividend payout ratio (DPR) is 37.31%.

Insider Buying and Selling

In other A. O. Smith news, SVP Darrell W. Schuh sold 1,104 shares of the firm’s stock in a transaction that occurred on Wednesday, March 4th. The shares were sold at an average price of $74.39, for a total transaction of $82,126.56. Following the completion of the transaction, the senior vice president owned 2,201 shares of the company’s stock, valued at approximately $163,732.39. This trade represents a 33.40% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. 0.50% of the stock is owned by company insiders.

Hedge Funds Weigh In On A. O. Smith

A number of institutional investors and hedge funds have recently made changes to their positions in AOS. AQR Capital Management LLC increased its position in shares of A. O. Smith by 93.2% during the fourth quarter. AQR Capital Management LLC now owns 1,279,356 shares of the industrial products company’s stock valued at $85,563,000 after acquiring an additional 617,179 shares in the last quarter. Qube Research & Technologies Ltd increased its position in shares of A. O. Smith by 655.5% during the second quarter. Qube Research & Technologies Ltd now owns 710,716 shares of the industrial products company’s stock valued at $46,602,000 after acquiring an additional 616,638 shares in the last quarter. Caisse de depot et placement du Quebec grew its position in A. O. Smith by 530.1% in the 3rd quarter. Caisse de depot et placement du Quebec now owns 633,407 shares of the industrial products company’s stock worth $46,498,000 after purchasing an additional 532,875 shares during the period. Goldman Sachs Group Inc. grew its position in A. O. Smith by 64.2% in the 4th quarter. Goldman Sachs Group Inc. now owns 1,265,041 shares of the industrial products company’s stock worth $84,606,000 after purchasing an additional 494,503 shares during the period. Finally, The Manufacturers Life Insurance Company grew its position in A. O. Smith by 521.1% in the 2nd quarter. The Manufacturers Life Insurance Company now owns 581,070 shares of the industrial products company’s stock worth $38,101,000 after purchasing an additional 487,513 shares during the period. Institutional investors own 76.10% of the company’s stock.

Analysts Set New Price Targets

A number of analysts have recently weighed in on the stock. JPMorgan Chase & Co. dropped their target price on shares of A. O. Smith from $75.00 to $65.00 and set a “neutral” rating for the company in a report on Friday. Stifel Nicolaus set a $75.00 target price on shares of A. O. Smith in a report on Friday. Citigroup dropped their target price on shares of A. O. Smith from $78.00 to $74.00 and set a “neutral” rating for the company in a report on Monday, April 13th. Wall Street Zen lowered shares of A. O. Smith from a “buy” rating to a “hold” rating in a report on Saturday, February 14th. Finally, Robert W. Baird set a $70.00 target price on shares of A. O. Smith in a report on Friday. Two research analysts have rated the stock with a Buy rating, seven have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, A. O. Smith has a consensus rating of “Hold” and an average target price of $72.33.

A. O. Smith News Roundup

Here are the key news stories impacting A. O. Smith this week:

• Positive Sentiment: Solid cash generation — operating cash flow and free cash flow improved significantly in Q1, providing balance sheet flexibility and support for shareholders despite weaker top‑line trends. A. O. Smith Reports First Quarter 2026 Results and Lowers Full Year 2026 Outlook
• Neutral Sentiment: Investor materials available — the company posted its earnings press release, slide deck and full call/transcript, which provide detail on segment performance, supply‑chain impacts and assumptions behind the new guidance. Use these to model scenarios. Slide Deck / Press Release
• Negative Sentiment: Q1 missed consensus — reported EPS $0.85 vs. ~$0.94 expected and revenue $945.6M vs. ~$974M, signaling near‑term demand softness. A. O. Smith Q1 results summary
• Negative Sentiment: Lowered FY2026 outlook — management cut GAAP EPS guidance to $3.60–$3.90 (consensus ~3.98) and set revenue roughly flat to slightly below Street expectations, amplifying investor concern about growth for the year. FY2026 guidance update
• Negative Sentiment: China weakness and one‑time costs — Rest of World sales fell ~11% as China demand remained soft; transaction-related expenses from the Leonard Valve acquisition reduced near‑term earnings. Analysts flagged China drag as the key earnings headwind. A. O. Smith Balances Cash Strength With China Drag

A. O. Smith Company Profile

A. O. Smith Corporation, based in Milwaukee, Wisconsin, is a leading manufacturer of water heating and water treatment products for residential and commercial applications. Since its founding in 1874, the company has built a reputation for producing reliable, energy-efficient water heaters, boilers and pressure vessels. Its product portfolio encompasses gas, electric, condensing and tankless water heaters, as well as specialty boilers designed to meet a variety of building and industrial needs.

The company operates through two primary segments: North America and Asia.