A. O. Smith stock rallies 12% on Q4 earnings beat

Jan. 31, 2023 2:04 PM ETAOSBy: Pranav Ghumatkar, SA News Editor1 Comment

A. O. Smith (AOS) saw 6% decrease in Q4 net sales to $692M as pricing actions and higher boiler volumes driven by backlog reduction were more than offset by weaker residential water heater demand.
In local currency, segment sales decreased by approximately 4% year-over-year.
The decrease in sales in the fourth quarter of 2022 was driven by lower consumer demand in China due to COVID-19-related lockdowns.
Sales in India increased 16% in local currency in the fourth quarter of 2022.
As of December 31, 2022, cash and marketable securities balances totaled $481.8M and debt totaled $344.5M, resulting in a leverage ratio of 16.5% as measured by total debt-to-total capitalization.
2023 Outlook: Net sales $3,640-$3,865M vs. consensus of $3.7B, sales flat to 2022 at the mid-point with a range of plus or minus 3%; Adj. EPS of between $3.15 and $3.45 vs. consensus of $3.18.
"Our strong balance sheet and free cash flow continues to provide us the liquidity to focus on our capital allocation priorities of organic growth, dividends, acquisitions, and share repurchases, which we believe will enable us to execute our strategy to invest and grow profitably." said Kevin J. Wheeler, Chairman and CEO.
Q4 Earnings Call Presentation.
Previously: A. O. Smith reports Q4 earnings beat; initiates FY23 outlook (Jan. 31)