A. O. Smith Gears Up to Report Q1 Earnings: What to Expect?

Core Viewpoint - A. O. Smith Corporation (AOS) is expected to report a decline in both revenue and earnings for the first quarter of 2025, with revenues estimated at $947.3 million, down 3.2$947.3 million, indicating a 3.2% decline from the same quarter last year [1]. - The consensus estimate for earnings is 90 cents per share, which has remained stable over the past 60 days, representing a 10% decrease from the year-ago quarter [1]. Group 2: Recent Performance - In the last reported quarter, AOS's earnings missed the Zacks Consensus Estimate by 4.5%, with a trailing four-quarter negative earnings surprise averaging 1.1% [2]. Group 3: Influencing Factors - Tepid demand for residential and commercial water heater products in North America is expected to negatively impact the segment's performance, with revenues projected to decrease 2.6% to $746 million [3]. - Ongoing challenges in the Chinese real estate market are likely to affect AOS's performance, with estimated revenues for the Rest of World segment at$216 million, down 4.8% year-over-year [4]. - High costs and expenses have negatively impacted AOS's performance, with labor shortages and increased material costs contributing to the challenges [5]. Group 4: Acquisitions Impact - Recent acquisitions, such as the Pureit business from Unilever in November 2024, are expected to positively impact AOS's top line by enhancing its water treatment solutions and brand recognition in India [6]. - The acquisition of Impact Water Products in March 2024 has expanded AOS's water treatment footprint in North America, contributing to its North America segment [7]. Group 5: Earnings Whispers - AOS has an Earnings ESP of -0.93%, with the Most Accurate Estimate at 89 cents per share, which is lower than the Zacks Consensus Estimate of 90 cents [9]. - Currently, AOS holds a Zacks Rank of 4 (Sell), indicating a less favorable outlook for an earnings beat this quarter [9].