Water heating and treatment solutions company A.O. Smith (NYSE: AOS) will be reporting earnings this Thursday before the bell. Here’s what investors should know.
A. O. Smith beat analysts’ revenue expectations last quarter, reporting revenues of $1.00 billion, flat year on year. It was a strong quarter for the company, with a beat of analysts’ EPS estimates and full-year EPS guidance slightly topping analysts’ expectations.
Is A. O. Smith a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting A. O. Smith’s revenue to grow 2% year on year, slowing from the 4.4% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. A. O. Smith has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at A. O. Smith’s peers in the building products segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Zurn Elkay delivered year-on-year revenue growth of 8.7%, meeting analysts’ expectations, and Apogee reported revenues up 9.2%, topping estimates by 11.3%. Apogee traded up 15.3% following the results.
Read our full analysis of Zurn Elkay’s results here and Apogee’s results here.
Over the past year, investors have repeatedly shifted their focus from one macro narrative to another (AI disruption and AI capex spending to geopolitics, interest rates, and the broader health of the economy). While some of the building products stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 2.7% on average over the last month. A. O. Smith is up 6% during the same time and is heading into earnings with an average analyst price target of $66.20 (compared to the current share price of $61.90).
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