A.O. Smith Beats Q1 Estimates, Maintains 2025 Guidance

A.O. Smith reported first quarter 2025 earnings surpassing analyst expectations, with EPS of $0.95 and revenue of $963.9 million, despite a 1.5–2% year-over-year decline driven by lower North American water heater volumes and decreased sales in China. The company maintained its full-year revenue guidance at $3.85 billion and EPS guidance at $3.75, citing price increases and cost controls to offset tariff impacts. Operating margin remained steady at 19%, though free cash flow margin declined compared to last year. Segment earnings and margins fell year-over-year due to a tough comparison with prior pre-buy volumes and ongoing investments. A.O. Smith repurchased $121 million in shares, reaffirmed its $400 million repurchase plan for the year, and declared a $0.34 per share dividend. Management continues to focus on plant efficiency in North America and expects a continued single-digit sales decline in China, while noting sequential growth in North American water heater volumes and a 10% increase in boiler sales.