A. O. Smith (NYSE:AOS) Releases Earnings Results, Beats Expectations By $0.06 EPS

A. O. Smith (NYSE:AOS) posted its earnings results on Thursday. The industrial products company reported $0.90 EPS for the quarter, topping the consensus estimate of $0.84 by $0.06, FiscalAI reports. A. O. Smith had a net margin of 14.26% and a return on equity of 29.51%. The firm had revenue of $912.50 million during the quarter, compared to analysts’ expectations of $928.97 million. During the same quarter in the prior year, the firm earned $0.85 EPS. A. O. Smith’s quarterly revenue was up .0% on a year-over-year basis.

Here are the key takeaways from A. O. Smith’s conference call:

• Company delivered a record adjusted EPS of $3.85 in 2025 (up 6%), drove margin expansion across segments, generated strong free cash flow of $546 million (100% conversion), and returned $597 million to shareholders.
• Completed the acquisition of Leonard Valve to enter the water management market and bolster connected/digital capabilities, with management expecting ~ $70 million of Leonard sales in 2026.
• The Leonard Valve deal was funded with about $470 million of new debt, increasing 2026 interest expense (guidance $30–40 million) and raising leverage, which could constrain near-term financial flexibility.
• China remains a headwind—third‑party sales fell ~12% in 2025 and management expects mid‑single‑digit declines in 2026 with first‑half pressure from lapped subsidies and weak consumer demand while a strategic review of China options continues.
• North America water treatment improved profitability materially (≈400 bps YoY to ~13% operating margin) and management expects further margin expansion (~200 bps) and mid‑to‑high single‑digit/top‑line growth in boilers and water treatment in 2026.

A. O. Smith Stock Performance

NYSE:AOS opened at $73.49 on Friday. A. O. Smith has a 52-week low of $58.83 and a 52-week high of $77.31. The company has a debt-to-equity ratio of 0.06, a quick ratio of 0.95 and a current ratio of 1.50. The company has a market cap of $10.23 billion, a price-to-earnings ratio of 19.04, a PEG ratio of 1.50 and a beta of 1.35. The firm’s 50-day moving average is $68.82 and its 200-day moving average is $69.70.

A. O. Smith Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Tuesday, February 17th. Investors of record on Friday, January 30th will be given a dividend of $0.36 per share. The ex-dividend date of this dividend is Friday, January 30th. This represents a $1.44 dividend on an annualized basis and a yield of 2.0%. A. O. Smith’s payout ratio is 37.31%.

Trending Headlines about A. O. Smith

Here are the key news stories impacting A. O. Smith this week:

• Positive Sentiment: Q4 EPS beat and record full-year EPS — AOS reported $0.90 in Q4 vs. $0.84 expected and announced record 2025 diluted EPS of $3.85, driven by margin improvement and strong profitability metrics that support valuation. A. O. Smith Reports Record 2025 Diluted Earnings Per Share
• Positive Sentiment: Strength in North America and margin expansion — Management cited strong North American demand and 80 bps of operating margin improvement, helping EPS outperformance despite flat sales. A.O. Smith quarterly profit rises on strong North America demand
• Positive Sentiment: Capital returns and M&A — Company returned ~$597M to shareholders via dividends and buybacks in 2025 and closed the Leonard Valve acquisition to expand its water-management platform, both supportive of longer-term growth and EPS accretion. Press Release — 2025 results & 2026 guidance
• Neutral Sentiment: Analyst/style recognition — Zacks flags AOS as a top-ranked growth stock under its Style Scores, which can attract momentum and factor-based flows but is not an operational driver by itself. A.O. Smith is a Top-Ranked Growth Stock
• Neutral Sentiment: Earnings call detail available — Management commentary and the call transcript provide color on end-market trends and margin drivers for investors who want to dig deeper. Q4 2025 Earnings Call Transcript
• Negative Sentiment: Revenue missed and guidance slightly soft — Q4 sales were $912.5M vs. ~$929M expected (flat YoY), and management set FY2026 EPS guidance of $3.85–$4.15 (consensus ~4.07) and revenue guidance around $3.9–$4.0B, a touch below Street assumptions — a cap on upside. A. O. Smith Earnings Surpass Estimates in Q4, Sales Miss
• Negative Sentiment: Mixed market reaction — Coverage notes the earnings beat was offset by the revenue miss and conservative guide, moderating gains; near-term performance will track execution against the 2026 targets and demand trends. Earnings beat offset by revenue miss

Analyst Upgrades and Downgrades

Several research analysts have recently issued reports on the company. Stifel Nicolaus set a $85.00 price target on A. O. Smith and gave the stock a “buy” rating in a research note on Friday. Citigroup reissued a “neutral” rating and set a $78.00 target price (up from $72.00) on shares of A. O. Smith in a research note on Friday. Robert W. Baird set a $77.00 target price on A. O. Smith in a report on Friday. Jefferies Financial Group set a $75.00 price target on shares of A. O. Smith and gave the company a “hold” rating in a research report on Friday, January 9th. Finally, Weiss Ratings reissued a “hold (c)” rating on shares of A. O. Smith in a research note on Wednesday, December 24th. Two analysts have rated the stock with a Buy rating and seven have assigned a Hold rating to the company. According to data from MarketBeat, the stock has a consensus rating of “Hold” and a consensus price target of $78.00.

Institutional Investors Weigh In On A. O. Smith

A number of institutional investors have recently added to or reduced their stakes in the stock. Certuity LLC increased its position in A. O. Smith by 38.8% during the third quarter. Certuity LLC now owns 6,154 shares of the industrial products company’s stock worth $452,000 after acquiring an additional 1,720 shares during the period. Jefferies Financial Group Inc. acquired a new position in shares of A. O. Smith during the 3rd quarter worth approximately $281,000. Rafferty Asset Management LLC grew its position in shares of A. O. Smith by 19.1% during the 2nd quarter. Rafferty Asset Management LLC now owns 10,502 shares of the industrial products company’s stock worth $689,000 after purchasing an additional 1,683 shares in the last quarter. NewEdge Advisors LLC increased its holdings in shares of A. O. Smith by 203.6% during the second quarter. NewEdge Advisors LLC now owns 4,812 shares of the industrial products company’s stock worth $316,000 after purchasing an additional 3,227 shares during the period. Finally, Banco Bilbao Vizcaya Argentaria S.A. acquired a new stake in shares of A. O. Smith in the third quarter valued at approximately $261,000. 76.10% of the stock is owned by institutional investors and hedge funds.

About A. O. Smith

A. O. Smith Corporation, based in Milwaukee, Wisconsin, is a leading manufacturer of water heating and water treatment products for residential and commercial applications. Since its founding in 1874, the company has built a reputation for producing reliable, energy-efficient water heaters, boilers and pressure vessels. Its product portfolio encompasses gas, electric, condensing and tankless water heaters, as well as specialty boilers designed to meet a variety of building and industrial needs.

The company operates through two primary segments: North America and Asia.