Latest news with #SteveShafer
Yahoo
24-07-2025
- Business
- Yahoo
A.O. Smith lifts annual profit forecast, considers China partnership
(Reuters) -Water heater maker A.O. Smith will consider strategic partnerships and other alternatives for its China business, it said on Thursday after raising its annual profit forecast. "We believe the China market has substantial long-term prospects and are committed to realizing the potential upside inherent in the company's China business for our company," CEO Steve Shafer said. The Milwaukee, Wisconsin-based company is banking on higher market share in the second half of the year and cost savings from its restructuring actions. It now expects annual adjusted earnings per share to be in the range of $3.70 to $3.90, compared with its previous forecast of $3.60 to $3.90. Analysts on an average expected $3.78 per share for 2025, according to data compiled by LSEG. But second quarter revenue fell about 1% from a year ago to $1.01 billion. Sales from other parts of the world, including China and India, also fell nearly 2% to $240.1 million. Net income for the quarter ended June 30 was $152.2 million billion, or $1.07 per share, compared with $156.2 million, or $1.06 per share, a year earlier.
Reuters
24-07-2025
- Business
- Reuters
A.O. Smith lifts annual profit forecast, considers China partnership
July 24 (Reuters) - Water heater maker A.O. Smith (AOS.N), opens new tab will consider strategic partnerships and other alternatives for its China business, it said on Thursday after raising its annual profit forecast. "We believe the China market has substantial long-term prospects and are committed to realizing the potential upside inherent in the company's China business for our company," CEO Steve Shafer said. The Milwaukee, Wisconsin-based company is banking on higher market share in the second half of the year and cost savings from its restructuring actions. It now expects annual adjusted earnings per share to be in the range of $3.70 to $3.90, compared with its previous forecast of $3.60 to $3.90. Analysts on an average expected $3.78 per share for 2025, according to data compiled by LSEG. But second quarter revenue fell about 1% from a year ago to $1.01 billion. Sales from other parts of the world, including China and India, also fell nearly 2% to $240.1 million. Net income for the quarter ended June 30 was $152.2 million billion, or $1.07 per share, compared with $156.2 million, or $1.06 per share, a year earlier.
Yahoo
13-05-2025
- Business
- Yahoo
AOS Q1 Earnings Call: Tariffs, CEO Transition, and Operational Adjustments Shape Outlook
Water heating and treatment solutions company A.O. Smith (NYSE:AOS) announced better-than-expected revenue in Q1 CY2025, but sales fell by 1.5% year on year to $963.9 million. The company's full-year revenue guidance of $3.85 billion at the midpoint came in 0.5% above analysts' estimates. Its non-GAAP profit of $0.95 per share was 3.8% above analysts' consensus estimates. Is now the time to buy AOS? Find out in our full research report (it's free). Revenue: $963.9 million vs analyst estimates of $953.7 million (1.5% year-on-year decline, 1.1% beat) Adjusted EPS: $0.95 vs analyst estimates of $0.91 (3.8% beat) Adjusted EBITDA: $203.5 million vs analyst estimates of $197.3 million (21.1% margin, 3.2% beat) The company reconfirmed its revenue guidance for the full year of $3.85 billion at the midpoint Management reiterated its full-year Adjusted EPS guidance of $3.75 at the midpoint Operating Margin: 19%, in line with the same quarter last year Free Cash Flow Margin: 1.8%, down from 8.6% in the same quarter last year Organic Revenue fell 2.5% year on year (1.8% in the same quarter last year) Market Capitalization: $10.01 billion A. O. Smith's first quarter results reflected a combination of challenging end markets and internal actions to adapt to external cost pressures. Management pointed to lower North American water heater volumes—driven by a tough comparison to last year's pre-buy activity—as a primary driver of the sales decline, while highlighting growth in commercial boiler sales and disciplined cost containment. CEO Kevin Wheeler noted that the team 'delivered a solid performance in the first quarter with volumes tracking our expectations,' despite ongoing headwinds in China and lingering uncertainty from tariffs. Looking ahead, the company's full-year guidance is shaped by the volatile tariff environment and the transition of leadership to new CEO Steve Shafer. Management emphasized that announced price increases are expected to offset tariff-related cost inflation, but these have not yet been factored into top-line projections due to ongoing policy uncertainty. Wheeler explained, 'We have taken action and are confident in how we're going to maintain EPS in our guidance on sales,' while Shafer added that cross-functional tariff response teams are working to mitigate cost impacts and accelerate supply chain adjustments. Management's remarks centered on adapting to external challenges through targeted operational changes and strategic focus. The transition in executive leadership and ongoing response to tariffs were major themes. CEO Transition Announced: Steve Shafer will assume the CEO role on July 1, with Kevin Wheeler remaining as Executive Chairman. Management stressed continuity in strategy and a smooth leadership change. Tariff Response Actions: The company has mobilized cross-functional teams to address supply chain risks and manage tariff-induced cost increases. Pricing actions averaging 6%-9% for water heaters have been announced, though not fully reflected in revenue guidance. North America Sales Dynamics: Water heater volumes declined due to last year's pre-buy activity, but commercial boiler sales rose 10%. The company maintained stable production to promote plant efficiency and avoid excess inventory. China Market and Restructuring: Sales in China fell 4% in local currency, with consumer confidence and real estate weakness cited as key factors. Management is completing a restructuring program to realize $15 million in annual savings and expects margin improvement even with lower volumes. Water Treatment Channel Shift: In North America, water treatment sales growth in e-commerce, dealer, and direct-to-consumer channels offset declines in retail, reflecting a strategic shift away from less profitable channels. The company projects margin expansion for this segment through cost management and prioritizing higher-return sales channels. Management's outlook for the rest of the year hinges on navigating tariff-related cost volatility, executing announced price increases, and sustaining operational discipline in both North America and China. Tariff Mitigation Measures: Cross-functional teams are tasked with responding to evolving tariffs, including supply chain adjustments, pricing, and cost containment. The company expects pricing actions to help offset increased costs, but says the impact will be clearer by the end of the second quarter. China Recovery Uncertainty: The business continues to face weak consumer confidence and a slow real estate market in China. Management believes that recent stimulus serves as a market stabilizer but does not expect a near-term catalyst for significant growth. Product and Channel Optimization: Continued focus on margin improvement through channel prioritization in water treatment, further ramp-up of tankless production in Mexico to reduce tariff exposure, and investments in R&D and regulatory readiness are expected to support performance over time. Jeff Hammond (Keybanc Capital Markets): Asked about possible demand destruction from price hikes and if margin gains are expected. Management said pricing is intended to offset costs, not boost margins, and recurring water heater replacement demand stabilizes the business. Mike Halloran (Baird): Inquired about supply chain rebalancing needs due to tariffs. Management outlined accelerated tankless production in Mexico, flexibility in sourcing, and ongoing evaluation of further network changes as policy evolves. Saree Boroditsky (Jefferies): Sought clarity on the timing and impact of announced price increases. Management confirmed pricing actions have been communicated but are not factored into revenue guidance due to tariff uncertainty. Scott Graham (Seaport Research Partners): Questioned assumptions for residential water heater replacements and China's outlook. Management cited stable replacement rates in North America and emphasized consumer confidence—not just housing recovery—as crucial for China. David MacGregor (Longbow Research): Asked about U.S. production capacity and regulatory changes for commercial gas products. Management stated it has adequate domestic capacity, is already highly vertically integrated, and is preparing for new efficiency standards as scheduled. In the coming quarters, the StockStory team will monitor (1) the pace and effectiveness of tariff-related pricing actions and supply chain shifts, (2) signs of stabilization or improvement in China's consumer environment and the impact of restructuring, and (3) progress in transitioning tankless water heater production to Mexico to further insulate against tariff risks. Execution on cost management and regulatory preparation will also be critical. A. O. Smith currently trades at a forward P/E ratio of 18.3×. Should you load up, cash out, or stay put? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Business Standard
29-04-2025
- Business
- Business Standard
AO Smith Q1 revenue dips 2% on weak US, China water heater demand
A. O. Smith posted a year on year fall in first quarter net sales on Tuesday, as prolonged inflation in the US and an economic slowdown in China hurt demand for its water heaters in the regions. The company is also bracing for a potential drag from US President Donald Trump's tariffs, which have fueled concerns about an economic slowdown and a decline in consumer sentiment. "Given the uncertainty of the tariff environment, our guidance does not include our announced pricing, which we project will offset, along with other actions, the current announced tariffs," said CFO Steve Shafer. The Milwaukee, Wisconsin-based company maintained its annual revenue forecast between $3.8 billion and $3.9 billion, as well as adjusted profit outlook in the range of $3.60 to $3.90 per share. The company, which makes residential and commercial water heaters, boilers, tanks and treatment products, posted a 2 per cent fall in quarterly sales to $963.9 million. Analysts on an average expected $954 million, according to data compiled by LSEG. Also Read Sales in its North America segment, which accounted for more than 77 per cent of its total annual sales in 2024, fell 2 per cent to $748.7 million. "In China, continued economic challenges and soft consumer demand led to a 4 per cent year-over-year decrease in local currency sales," said CEO Kevin Wheeler. Sales from rest of world segment, which includes China and India, were flat to last year. Net income for the quarter ended March 31, was $136.6 million, or 95 cents per share, compared with $147.6 million or $1 per share a year earlier. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
