A.O. Smith reports record third-quarter earnings of $93.7M

By Katherine Michalets - Freeman Staff

Oct. 26, 2017

MILWAUKEE — The third quarter was stellar for A. O. Smith Corporation, which reported record net earnings of $93.7 million, or $0.54 per share, and an increase of 10 percent in sales.

According to the Milwaukee- based company, earnings per share grew 15 percent compared with third-quarter 2016 earnings per share of $0.47; and sales in the quarter ended Sept. 30 increased nearly 10 percent to $749.9 million compared with sales of $683.9 million during the same period in 2016.

“We saw double digit sales growth in the third quarter due to strong demand for our Lochinvar branded boilers and mid-single digit growth in residential water heater volumes in the U.S.,” said Chairman and Chief Executive Officer Ajita G. Rajendra in a statement. “Sales of our consumer products in China, particularly water treatment and air purification, contributed to our growth, as well.”

Sales for the North American segment for the third quarter, which includes the U.S. and Canadian water heaters, boilers and water treatment products, increased 8 percent to $486 million when compared with third-quarter 2016 sales of $450.8 million. A. O. Smith said the increase in sales was primarily due to increased sales of boilers, higher volumes of residential water heaters and pricing actions related to higher steel costs. Lochinvar branded products grew 17 percent in the third quarter.

“In early September, we welcomed the Hague team to the A. O. Smith family, through our acquisition of the U.S. water softener company. Hague fits squarely in our acquisition strategy to expand our global water treatment platform. We look forward to growing the business together and pursuing the global opportunities that we believe Hague’s innovative and high quality products bring to A. O. Smith,” Rajendra said in the statement.

North America segment earnings of $110.3 million were 10 percent higher than the $100.5 million earned in the third quarter of the prior year. For the “Rest of the World” segment, which is primarily comprised of China, Europe and India, earnings increased approximately 12 percent in the third quarter of 2017 to $270.1 million compared with the year-ago quarter. Higher demand for the company’s premium consumer products, as well as pricing actions due to higher steel and other costs, drove China sales up nearly 13 percent, according to the release.