Will North America Unit Fuel A. O. Smith's (AOS) Q3 Earnings?
A. O. Smith Corporation AOS is scheduled to report third-quarter results on Oct 26 before market open.
The Zacks Consensus Estimate for the company’s third-quarter earnings has been revised upward by 2.6% in the past 60 days. The company has a stellar earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average beat being 10.5%.
Let’s see how things are shaping up for A.O. Smith this earnings season.
Factors to Note
We expect the North America segment’s third-quarter revenues to increase 2.7% from the year-ago reported number, driven by robust demand for commercial and residential water heaters. Our estimate for the segment’s adjusted operating income in the quarter indicates a year-over-year increase of 7.9%.
Strong demand for residential and commercial water treatment products in China and higher sales in India are likely to boost the Rest of the World segment’s revenues in the to-be-reported quarter.
Also, A. O. Smith’s third-quarter results are expected to reflect the benefits of improving supply chains and higher shipments. For the third quarter, we expect AOS’ revenues to increase 1.7% from the year-ago reported figure. Our estimate for the company’s earnings indicates a 10.7% rise from the year-ago reported number.
However, increasing steel costs are likely to partly affect AOS’ bottom line in the third quarter. Forex woes are expected to hurt the company’s top line in the soon-to-be-reported quarter.
A. O. Smith Corporation Price and EPS Surprise
A. O. Smith Corporation price-eps-surprise | A. O. Smith Corporation Quote
Earnings Whispers
Our proven model suggests an earnings beat for AOS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: A. O. Smith has an Earnings ESP of +3.02% as the Most Accurate Estimate is pegged at 81 cents, which is higher than the Zacks Consensus Estimate of 79 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: A. O. Smith carries a Zacks Rank of 2.
Highlights of Q2 Earnings
A. O. Smith reported second-quarter 2023 adjusted earnings (excluding 3 cents from non-recurring items) of $1.01 per share, which surpassed the Zacks Consensus Estimate of adjusted earnings of 91 cents per share. The bottom line jumped 23.2% year over year. Net sales of $960.8 million underperformed the consensus estimate of $971 million. The top line dipped 0.5% year over year.
Other Stocks to Consider
Here are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Emerson Electric Co. EMR has an Earnings ESP of +0.02% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to release fourth-quarter fiscal 2023 (ended Sep 30, 2023) results on Oct 30. Emerson’s earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters while missing in one, the average beat being 7.4%.
Ingersoll Rand Inc. IR has an Earnings ESP of +1.44% and a Zacks Rank of 3. The company is slated to release third-quarter 2023 results on Nov 1.
Ingersoll Rand’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 14.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Emerson Electric Co. (EMR) : Free Stock Analysis Report
A. O. Smith Corporation (AOS) : Free Stock Analysis Report
Ingersoll Rand Inc. (IR) : Free Stock Analysis Report
