In This Article:
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North America Segment Sales: $703 million, a 1% decline compared with 2023.
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North America Segment Earnings: $163 million, decreased 4% compared with 2023.
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North America Segment Margin: 23.1%, a decrease of 80 basis points year over year.
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Rest of the World Segment Sales: $210 million, decreased 10% compared to last year.
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Rest of the World Segment Earnings: $14 million, with a segment margin of 6.5% in 2024.
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Free Cash Flow: $283 million during the first nine months of 2024.
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Cash Balance: $256 million at the end of September.
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Net Cash Position: $136 million.
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Leverage Ratio: 5.9% as measured by total debt.
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Dividend Increase: 6% increase to $0.34 per share.
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Share Repurchase: Approximately 2.9 million shares for $237 million in the first nine months of 2024.
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2024 EPS Outlook: Expected range of $3.70 to $3.85 per share.
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Capital Expenditures: Expected between $105 million and $115 million for the year.
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Operating Cash Flow: Expected to be $525 million for the year.
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Free Cash Flow Guidance: Approximately $415 million for the year.
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Effective Tax Rate: Estimated to be approximately 24%.
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Outstanding Diluted Shares: 147 million at the end of 2024.
Release Date: October 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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A.O. Smith Corp (NYSE:AOS) reported double-digit growth in North America's water treatment and boiler businesses, with sales increasing by 15% and 16% respectively.
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The company increased its dividend by 6% in October, marking the 32nd consecutive year of annual dividend increases.
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A.O. Smith Corp (NYSE:AOS) is on track to close the acquisition of Pure from Unilever by the end of 2024, which aligns with its strategy to enhance its water treatment product portfolio in South Asia.
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The company celebrated the grand opening of a new facility in North America for manufacturing gas tankless water heaters, with production expected to begin in early 2025.
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A.O. Smith Corp (NYSE:AOS) maintained a strong balance sheet with a net cash position of $136 million and a leverage ratio of 5.9%.
Negative Points
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Third-quarter sales and earnings decreased compared to the previous year, with a 17% decline in China and a 4% decrease in North American water heater sales.
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The company faced increased pricing and promotional pressure in China, particularly in the mid-price sector of the market.
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A.O. Smith Corp (NYSE:AOS) experienced softer-than-expected orders in its North American water heater business, attributed to reduced lead times and softening end-market demand.
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The Rest of the World segment saw a 10% decrease in sales, driven by lower sales of core water heater and water treatment products in China.
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Free cash flow decreased to $283 million during the first nine months of 2024, primarily due to higher inventory balances and lower customer deposits in China.