A. O. Smith (AOS) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales were $964 million, down 2% year-over-year due to lower North America water heater volumes and weaker China demand; EPS was $0.95, down 5% year-over-year.

• North America sales declined 2% year-over-year but rose sequentially; boiler sales increased 10% while water heater volumes fell.

• China sales decreased 4% in local currency; Pureit acquisition contributed $12 million to Rest of World sales.

• Operating margin improved by 200 bps in China and North American Water Treatment segments due to cost controls and restructuring.

• CEO transition announced: Steve Shafer to become CEO effective July 1, with Kevin Wheeler remaining as Executive Chairman.

Financial highlights

• Q1 2025 net sales: $963.9–$964 million (down 2% year-over-year); EPS: $0.95 (down 5% year-over-year); net earnings: $136.6 million (down 7%).

• North America segment sales: $748.7–$749 million (down 2%); segment margin: 24.7% (down 120 bps).

• Rest of World sales: $226.7–$227 million (flat year-over-year); segment margin: 8.7% (up 110 bps).

• Free cash flow: $17.4 million (down from $84.6 million year-over-year); operating cash flow: $38.7–$39 million.

• $120.6–$121 million in share repurchases in Q1; $400 million full-year repurchase plan.

Outlook and guidance

• 2025 sales expected to be flat to up 2%; guidance range: $3.8–$3.9 billion.

• EPS guidance for 2025: $3.60–$3.90; excludes impacts from future acquisitions and announced pricing actions.

• Free cash flow projected at $500–$550 million; CapEx expected at $90–$100 million.

• North America segment margin guided at 24–24.5%; Rest of World at 8–9%.

• China sales projected to decrease 5–8% in local currency; North America boiler sales to grow 3–5%.