A. O. Smith (NYSE:AOS) Releases Quarterly Earnings Results

A. O. Smith (NYSE:AOS) issued its quarterly earnings data on Thursday. The industrial products company reported $0.90 earnings per share for the quarter, beating the consensus estimate of $0.84 by $0.06, FiscalAI reports. The company had revenue of $912.50 million for the quarter, compared to analyst estimates of $928.97 million. A. O. Smith had a net margin of 13.85% and a return on equity of 29.34%. The company’s revenue was up .0% on a year-over-year basis. During the same period in the prior year, the firm earned $0.85 earnings per share.

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

• Company delivered a record adjusted EPS of $3.85 in 2025 (up 6%), drove margin expansion across segments, generated strong free cash flow of $546 million (100% conversion), and returned $597 million to shareholders.
• Completed the acquisition of Leonard Valve to enter the water management market and bolster connected/digital capabilities, with management expecting ~ $70 million of Leonard sales in 2026.
• The Leonard Valve deal was funded with about $470 million of new debt, increasing 2026 interest expense (guidance $30–40 million) and raising leverage, which could constrain near-term financial flexibility.
• China remains a headwind—third‑party sales fell ~12% in 2025 and management expects mid‑single‑digit declines in 2026 with first‑half pressure from lapped subsidies and weak consumer demand while a strategic review of China options continues.
• North America water treatment improved profitability materially (≈400 bps YoY to ~13% operating margin) and management expects further margin expansion (~200 bps) and mid‑to‑high single‑digit/top‑line growth in boilers and water treatment in 2026.

A. O. Smith Trading Up 5.2%

AOS opened at $73.12 on Friday. The company has a market cap of $10.18 billion, a P/E ratio of 19.71, a PEG ratio of 1.41 and a beta of 1.35. The company has a current ratio of 1.54, a quick ratio of 0.95 and a debt-to-equity ratio of 0.09. The company’s 50 day moving average is $68.66 and its 200-day moving average is $69.66. A. O. Smith has a 1-year low of $58.83 and a 1-year high of $77.31.

A. O. Smith Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Tuesday, February 17th. Stockholders of record on Friday, January 30th will be issued a $0.36 dividend. The ex-dividend date of this dividend is Friday, January 30th. This represents a $1.44 dividend on an annualized basis and a dividend yield of 2.0%. A. O. Smith’s dividend payout ratio is 38.81%.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of AOS. Qube Research & Technologies Ltd boosted its holdings in shares of A. O. Smith by 655.5% during the 2nd 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 lifted its holdings in A. O. Smith by 530.1% during 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 buying an additional 532,875 shares during the period. The Manufacturers Life Insurance Company grew its position in shares of 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 valued at $38,101,000 after buying an additional 487,513 shares during the last quarter. Worldquant Millennium Advisors LLC boosted its holdings in A. O. Smith by 171.6% in the second quarter. Worldquant Millennium Advisors LLC now owns 667,655 shares of the industrial products company’s stock valued at $43,778,000 after acquiring an additional 421,845 shares during the last quarter. Finally, UBS Group AG lifted its position in shares of A. O. Smith by 35.4% in the 3rd quarter. UBS Group AG now owns 1,112,065 shares of the industrial products company’s stock worth $81,637,000 after purchasing an additional 290,841 shares during the period. 76.10% of the stock is currently owned by institutional investors and hedge funds.

Key Stories Impacting A. O. Smith

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

• Positive Sentiment: Q4 EPS beat and margin improvement — AOS reported $0.90 EPS vs. $0.84 consensus, with operating margin gains that helped offset flat sales; earnings beat drove optimism about profitability. A.O. Smith (AOS) Q4 Earnings Beat
• Positive Sentiment: Strong cash flow and shareholder returns; acquisition adds scale — AOS reported record 2025 diluted EPS of $3.85, generated robust free cash flow (~$546M) and returned ~$597M to shareholders via dividends and buybacks; it also closed the Leonard Valve acquisition to expand its water‑management portfolio. A. O. Smith Reports Record 2025 EPS
• Neutral Sentiment: Market reaction and coverage — Several outlets note the stock is rising today as investors focus on the EPS beat and buyback/dividend activity; coverage provides context but not new fundamentals. Why is A O Smith (AOS) stock rocketing higher today?
• Neutral Sentiment: Full earnings materials available — Call transcript and slide deck published (useful for detail on channel trends, China, and margin outlook). A O Smith AOS Q4 2025 Earnings Call Transcript
• Negative Sentiment: FY‑2026 guidance slightly below consensus — Management set EPS guidance of $3.85–$4.15 versus a Street consensus ~$4.07, and revenue guidance of $3.9B–$4.0B versus ~$4.0B expected; the below‑consensus lower bound and conservative revenue range introduce downside risk to near‑term expectations. A.O. Smith tops Q4 earnings estimates, issues 2026 guidance
• Negative Sentiment: Revenue miss in Q4 — Quarterly sales $912.5M missed consensus (~$929M), reflecting flat year‑over‑year revenue and some regional weakness (notably China), which tempers the EPS beat. A O Smith (NYSE:AOS) misses Q4 CY2025 revenue estimates
• Negative Sentiment: Earnings beat offset by revenue/macro concerns — Analysts note the EPS upside was largely margin‑driven; ongoing demand variability across regions and conservative 2026 top‑line guidance could limit upside until growth visibility improves. A.O. Smith earnings beat offset by revenue miss

Analyst Ratings Changes

A number of equities analysts recently commented on the stock. Citigroup reaffirmed a “neutral” rating on shares of A. O. Smith in a research report on Friday. Wall Street Zen upgraded A. O. Smith from a “hold” rating to a “buy” rating in a research report on Saturday, October 18th. Jefferies Financial Group set a $75.00 target price on A. O. Smith and gave the stock a “hold” rating in a report on Friday, January 9th. Weiss Ratings reaffirmed a “hold (c)” rating on shares of A. O. Smith in a research note on Wednesday, December 24th. Finally, Robert W. Baird set a $76.00 price objective on shares of A. O. Smith in a research note on Wednesday, October 29th. Two investment analysts have rated the stock with a Buy rating and seven have given a Hold rating to the stock. According to MarketBeat, the stock presently has a consensus rating of “Hold” and an average price target of $76.50.

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.