Stock Monitor: Allied Motion Technologies Post Earnings Reporting
LONDON, UK / ACCESSWIRE / May 14, 2018 / If you want access to our free earnings report on A. O. Smith Corp. (NYSE: AOS), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=AOS. The Company reported its first quarter fiscal 2018 operating and financial results on April 26, 2018. The maker of water heaters and boiler surpassed earnings estimate. The Company also provided sales and earnings guidance for FY18. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Earnings Highlights and Summary
A. O. Smith announced record sales of $788.0 million for the first quarter of the fiscal year 2018. The Company's sales were 6.5% higher than the $740.0 million reported in Q1 2017. However, A. O. Smith's revenue numbers lagged analysts' estimates of $792.9 million.
A. O. Smith announced net earnings of $98.8 million, or $0.57 per share, in Q1 2018 compared to $87.7 million, or $0.50 per share, in Q1 2017. The Company's adjusted net earnings were $103.8 million, or $0.60 per share, in the reported quarter compared to $87.7 million, or $0.50 per share, in the prior year's same quarter, and excluded after-tax restructuring and impairment charges of $5.0 million, or $0.03 per share, related to the closing of the Company's commercial water heater plant in Renton, Washington, as well as to the transfer of production to plants in Tennessee and South Carolina. A. O. Smith's earnings beat Wall Street's estimates of $0.58 per share.
During Q1 2018, A. O. Smith's North America segment's sales rose 3% to 501.7 million compared to $487.3 million in Q1 2017. A. O. Smith's increased boiler volumes and increased sales due to pricing actions for water heaters in mid-2017 in response to higher steel costs were partially offset by lower water heater volumes in Canada. The segment's earnings increased 2% to $106.0 million in Q1 2018 versus the $104.2 million earned in the prior year's comparable quarter. The North America segment's margin improved to 22.5% in Q1 2018 compared to 21.4% in Q1 2017.
For Q1 2018, A. O. Smith's Rest of World segment's sales increased 13% to $293.8 million compared to $259.5 million in Q1 2017. In China, the segment's sales rose 13%, including approximately $21 million of benefit from currency translation due to the appreciation of the China currency, compared to the prior year. For the reported quarter, the segment's earnings increased 11% to $36.1 million compared to the $32.5 million earned in the year earlier corresponding quarter. For Q1 2018, the Rest of World segment's margin was 12.3%, a modest decrease from 12.5% in Q1 2017.
During Q1 2018, A. O. Smith repurchased approximately 520,000 shares of its common stock for a total of $33 million. Approximately 1.9 million shares remained on the Company's existing repurchase authority as of March 31, 2018.
At the end of Q1 2018, A. O. Smith's leverage declined to 14.6% from 20.0% at the end of FY17. The reduction was partially due to the repatriation of over $210 million of cash from outside the US, which was used to pay down floating rate debt.
During Q1 2018, A. O. Smith's cash provided by operations was $43.2 million compared to $11.5 million in Q1 2017. The Company's reported quarter cash flow benefited from higher adjusted net earnings and smaller increases in working capital. At the end of March 2018, the Company had cash and marketable securities balances totaling $679.7 million, located offshore, while its net cash position was approximately $386.5 million.
A. O. Smith's effective income tax rate was 21.2% in Q1 2018, lower than the rate of 27.2% in Q1 2017. The lower rate was due to lower federal income taxes resulting from the US Tax Cut and Jobs Act 2017 (TCJA), which was partially offset by lower stock-based compensation tax benefits.
For the full fiscal year 2018, A. O. Smith is forecasting an organic growth, supported by stable water heater replacement demand, to result in a sales growth of between 10% and 10.75%. The Company raised its adjusted earnings per share guidance to a range of $2.55 to $2.61 for FY18.
Stock Performance Snapshot
May 11, 2018 - At Friday's closing bell, A. O. Smith's stock marginally fell 0.14%, ending the trading session at $63.99.
Volume traded for the day: 944.57 thousand shares.
Stock performance in the last three-month – up 4.97%; previous six-month period – up 7.42%; past twelve-month period – up 18.26%; and year-to-date – up 4.42%
After last Friday's close, A. O. Smith's market cap was at $10.87 billion.
Price to Earnings (P/E) ratio was at 29.07.
The stock has a dividend yield of 1.13%.
The stock is part of the Industrial Goods sector, categorized under the Industrial Electrical Equipment industry. This sector was up 0.1% at the end of the session.
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