A.O. Smith Corp (AOS) Reports 27% YoY Increase in EPS for Q3 2023
A.O. Smith Corp (NYSE:AOS) reported a 27% YoY increase in Earnings Per Share (EPS) for Q3 2023, reaching $0.90.
Net sales for the quarter were $938 million, marking a 7% YoY increase.
The company also reported strong operating cash flow and free cash flow of $439 million and $396 million, respectively.
A.O. Smith Corp (NYSE:AOS) has raised its 2023 outlook, expecting sales to grow approximately 2% compared to 2022.
Released on October 26, 2023, A.O. Smith Corp (NYSE:AOS)'s Q3 2023 earnings report showed a strong performance with a 27% YoY increase in EPS. The company also reported net earnings of $135.4 million and net sales of $938 million, a 7% increase from the previous year.
Financial Highlights
Key financial metrics for Q3 2023 showed a positive trend for A.O. Smith Corp (NYSE:AOS). Net sales increased by 7% YoY to reach $937.5 million, while net earnings rose by 23% to $135.4 million. Diluted earnings per share also saw a significant increase of 27%, reaching $0.90.
According to Kevin J. Wheeler, chairman and chief executive officer, the strong performance was driven by "continued strength in residential water heater demand and lower year-over-year material costs in North America." He also noted a 9% sales growth in China and a 17% local currency sales growth in India.
Segment-level Performance
In North America, Q3 sales increased by 9% YoY to $709.9 million, while segment earnings rose by 20% to $170.0 million. The Rest of World segment saw a 1% increase in sales to $233.4 million, with segment earnings increasing by 6% to $23.2 million.
Balance Sheet and Capital Allocation
As of September 30, 2023, A.O. Smith Corp (NYSE:AOS) had cash and marketable securities balances totaling $341.8 million and debt totaling $129.6 million. The company also reported strong cash flow, with cash provided by operations reaching $439.0 million and free cash flow at $396.3 million.
The company also repurchased approximately 2.4 million shares at a cost of $161.4 million in the nine months ended September 30, 2023. The company's board of directors approved a 7% increase in the dividend rate on October 9, 2023.
2023 Outlook
A.O. Smith Corp (NYSE:AOS) has raised its 2023 outlook, expecting sales to grow approximately 2% compared to 2022. The company also expects its full year adjusted EPS to be between $3.70 and $3.80, a 19% YoY increase at the mid-point.
Explore the complete 8-K earnings release (here) from A.O. Smith Corp for further details.
This article first appeared on GuruFocus.
