AOS earnings analysis
What we found in AOS's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
A. O. Smith reported disappointing Q1 2026 results, with revenue of $945.6 million and EPS of $0.85, both below analyst expectations of $974.7 million in revenue and $0.94 in EPS. Management lowered its full-year EPS guidance to a range of $3.60-$3.90, driven by challenges in the Chinese market. Despite a decrease in overall sales, free cash flow significantly improved to $118.9 million from $17.4 million a year ago.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Decrease
- Revenue declined to $945.6 million, down from $963.9 million a year ago.
- EPS Miss
- Reported EPS of $0.85 missed the estimate of $0.94.
- Segment Highlights
- North America segment grew to $753.4 million, up from $748.7 million; China sales dropped 17%.
- Free Cash Flow Improvement
- Free cash flow increased to $118.9 million from $17.4 million.
- Lowered EPS Guidance
- EPS guidance cut to $3.60-$3.90 from $3.85-$4.15.
- Acquisition Contribution
- Acquired Leonard Valve contributed $16 million to revenue.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- China Market Weakness
- China segment sales decreased by 17% due to market challenges.
- Increased Debt Levels
- Total debt rose by $460.8 million, increasing leverage ratio to 24.7%.
- Operational Disruption in North America
- Production impacted by weather-related disruptions at Ashland City plant.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.85
- Gross margin
- 38.7%
- Segment
- North America: 753.4M
- Segment
- Rest of World: 200.7M
What they said about what is next.
Full-year sales growth outlook is lowered to 2-4%.
The filing reads worse than the one before it.
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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