A. O. Smith Reports Third Quarter 2026 Results
Key Highlights
- ➤China business sale values 81% interest at approximately $400 million
- ➤2026 adjusted EPS guidance excluding China set at $3.42-$3.52
- ➤Q3 sales $940.5 million, down less than 1% year over year
- ➤Q3 net earnings $126.3 million, down 4% year over year
- ➤North America sales rose 3% to $761.6 million
Expert Statements
Steve Shafer, Chairman and Chief Executive Officer of A. O. Smith
“Disciplined execution across our businesses remained a priority in the third quarter as we navigated persistent inflationary pressures, softer residential water heater demand in North America, and ongoing market challenges in China.”
Steve Shafer, Chairman and Chief Executive Officer of A. O. Smith
“Our teams adapted to changing market conditions, managed costs and stayed focused on meeting our customers' needs. Supported by our leading market positions and financial strength, we believe we remain well positioned to address near-term headwinds and deliver long-term, profitable growth.”
Steve Shafer, Chairman and Chief Executive Officer of A. O. Smith
“Separately, earlier this week we announced definitive agreements with CPE to acquire an 81% interest in our China business.”
Steve Shafer, Chairman and Chief Executive Officer of A. O. Smith
“Our team in China has built a leading premium brand over more than three decades, and CPE is well positioned to lead that business forward.”
Steve Shafer, Chairman and Chief Executive Officer of A. O. Smith
“For A. O. Smith, this transaction completes our strategic assessment and enables us to focus our capital and resources on our highest-return opportunities and sustainable value creation.”
Steve Shafer, Chairman and Chief Executive Officer of A. O. Smith
“At the same time, our retained 19% stake and long-term brand license give our shareholders the opportunity to benefit from future growth in China under CPE's leadership.”
Steve Shafer, Chairman and Chief Executive Officer of A. O. Smith
“Our updated guidance reflects a more focused A. O. Smith, and our teams are committed to finishing the year strong.”
Steve Shafer, Chairman and Chief Executive Officer of A. O. Smith
“Looking ahead, we are excited about the opportunities in front of us, from our leading North American water heating and boiler franchise to our growth platforms in water treatment, water management and India.”
Steve Shafer, Chairman and Chief Executive Officer of A. O. Smith
“By concentrating on where we win, we are well positioned to drive profitable growth and create long-term value for our shareholders.”
Third Quarter 2026 Highlights (Comparisons are year-over-year ("YoY"), unless otherwise noted)
* Sales of $941 million; net earnings of $126 million and diluted earnings per share (EPS) of $0.93 * North America segment sales of $761.6 million increased 3% driven by Leonard Valve acquisition sales, 13% boiler sales growth and the benefits of pricing actions, partially offset by lower residential water heater volumes * Rest of World segment sales of $192.8 million decreased 7%, reflecting continued weakness in China's consumer appliance market * Year-to-date operating cash flow was $429 million and free cash flow increased 4% to $396 million * Concluded China strategic assessment with definitive agreements, announced October 27, under which CPE will acquire an 81% interest in the Company's China business; with A. O. Smith retaining a 19% stake and long-term brand license * 2026 full year guidance has been updated to exclude the China business for all of 2026: * Net sales growth, excluding China, of approximately 4% * Adjusted EPS¹, excluding China, of between $3.42 and $3.52 (1) Excludes full year North America water treatment estimated pre-tax restructuring and impairment expenses of approximately $20 million.
Get started
Create a free account to read the full story.