Water heating and treatment solutions company A.O. Smith (NYSE: AOS) will be reporting results this Thursday before market open. Here’s what investors should know.
A. O. Smith missed analysts’ revenue expectations last quarter, reporting revenues of $945.6 million, down 1.9% year on year. It was a softer quarter for the company, with full-year EPS guidance missing analysts’ expectations significantly and a significant miss of analysts’ EPS estimates.
Is A. O. Smith a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting A. O. Smith’s revenue to decline 2.1% year on year, in line with the 1.3% decrease it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. A. O. Smith has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at A. O. Smith’s peers in the building products segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Carrier Global delivered year-on-year revenue growth of 3.9%, beating analysts’ expectations by 5.6%, and Zurn Elkay reported revenues up 10.5%, topping estimates by 1.6%.
Read our full analysis of Carrier Global’s results here and Zurn Elkay’s results here.
Over the past year, investors have repeatedly shifted their focus from one macro narrative to another (AI disruption and AI capex spending to geopolitics, interest rates, and the broader health of the economy). While some of the building products stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3.3% on average over the last month. A. O. Smith is up 3.7% during the same time and is heading into earnings with an average analyst price target of $70.55 (compared to the current share price of $63.99).
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