Earnings analysis · 10-Q
AOS earnings analysis
Filed April 30, 2026 · Our reading of the company's report
The latest report
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…
Read full summary
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.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $0.85
- Gross margin
- 38.7%
What stood out
-
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.
What to watch
-
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.
Management's outlook
Full-year sales growth outlook is lowered to 2-4%.
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.