A. O. Smith Reports 1% Decrease in 2024 Net Sales

By Bobby Samwell • Thursday, January 30 15:43 • Permanent Link

A. O. Smith Corporation has reported its 2024 results and introduced 2025 guidance, highlighting key financial metrics and segment-level performance. In 2024, the company experienced a 1% decrease in net sales compared to the previous year, amounting to $3.8 billion. Net earnings for the year were reported at $533.6 million, a 4% decrease from 2023. Adjusted earnings for 2024 were $548.0 million, resulting in adjusted earnings per share of $3.73, a 2% decrease from the previous year.

Breaking down the results further, sales in North America for 2024 slightly increased to $3.0 billion, with segment earnings of $707.5 million and a segment margin of 24.0%. However, the fourth quarter saw a 7% decrease in sales compared to the same period in 2023. In the rest of the world, sales for 2024 amounted to $918.6 million, representing a 4% decrease from the previous year. Segment earnings were reported at $64.5 million, with a segment margin of 7.0%. The fourth quarter of 2024 saw a 9% decrease in sales compared to the same period in 2023.

The company's balance sheet, liquidity, and capital allocation show that as of December 31, 2024, cash and marketable securities balances totaled $276.1 million, while debt totaled $193.2 million, resulting in a leverage ratio of 9.3%. Cash provided by operations was $581.8 million, and free cash flow was $473.8 million in 2024, a decrease compared to 2023.

Looking ahead to 2025, A. O. Smith projects its consolidated sales to be flat to up 2% compared to 2024, with a full-year EPS between $3.60 and $3.90. The company anticipates flat year-over-year water heater industry unit volumes in North America and a single-digit sales decline in China for the rest of the world segment, with continued double-digit sales growth in India.

The company's board of directors approved a $0.34 per share dividend for shareholders of record on January 31, payable on February 18, marking 85 consecutive years of dividend payments. Additionally, the board increased the number of shares authorized for repurchase by an additional 5 million shares, with plans to increase spending to repurchase shares in 2025 to approximately $400 million.

As a result of these announcements, the company's shares have moved -3.5% on the market, and are now trading at a price of $66.77. For the full picture, make sure to review A. O. Smith's 8-K report.

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