A. O. Smith(US:AOS)2025-01-30 11:56Financial Performance - Net sales for 2024 were $3.818 billion, a decrease of 1% compared to 2023, primarily due to lower sales in China[3] - Net earnings for 2024 were $533.6 million, with diluted earnings per share (EPS) of $3.63, reflecting a 2% decrease year-over-year[3] - Adjusted earnings for 2024 were $548.0 million, resulting in adjusted EPS of $3.73, also a decrease of 2%[3] - Fourth quarter 2024 net sales were $912.4 million, an 8% decrease compared to Q4 2023, driven by lower water heater volumes[4] - North America net sales for Q4 2024 were $689.8 million, down 6.5% from $738.0 million in Q4 2023[30] - Adjusted earnings for Q4 2024 were $124.1 million, compared to $144.4 million in Q4 2023, a decrease of 14.1%[31] - Total Segment Earnings (non-GAAP) for Q4 2024 was $155.7 million, compared to $195.1 million in Q4 2023, reflecting a decline of 20.2%[33] - Total Segment Earnings (non-GAAP) for the twelve months ended December 31, 2024, was $771.6 million, down from $809.6 million in 2023, a decrease of 4.7%[33] Regional Sales Performance - In North America, full year 2024 sales were $3.0 billion, slightly increasing due to water heater pricing benefits despite lower volumes[5] - The Rest of World segment reported sales of $918.6 million for 2024, a 4% decrease year-over-year, impacted by lower sales in China[9] Shareholder Returns - The company returned $496 million to shareholders through dividends and share repurchases in 2024[3] - A. O. Smith repurchased 3.8 million shares at a cost of $305.8 million in 2024, with plans to increase repurchases to approximately $400 million in 2025[14] Future Projections - For 2025, the company projects net sales to be between $3.800 billion and $3.900 billion, indicating flat to 2% growth compared to 2024[16] - The company expects diluted EPS for 2025 to range from $3.60 to $3.90, slightly higher than 2024 at the mid-point[16] - Adjusted EPS (non-GAAP) guidance for 2025 is projected to be between $3.60 and $3.90, while the adjusted EPS for 2024 was $3.73[36] Operating Cash Flow and Expenses - Cash provided by operating activities for the twelve months ended December 31, 2024, was $581.8 million, down from $670.3 million in 2023, a decline of 13.2%[28] - Free Cash Flow (non-GAAP) for the twelve months ended December 31, 2024, was $473.8 million, a decrease from $597.7 million in 2023, representing a decline of 20.8%[34] - The company incurred capital expenditures of $108.0 million in 2024, up from $72.6 million in 2023, an increase of 48.7%[28] Debt and Assets - Total assets increased to $3,240.0 million as of December 31, 2024, compared to $3,213.9 million in 2023, an increase of 0.8%[26] - Long-term debt increased to $183.2 million in 2024 from $117.3 million in 2023, reflecting a significant increase of 56.2%[26] Earnings Analysis - Gross profit for the twelve months ended December 31, 2024, was $1,456.1 million, down from $1,484.8 million in 2023, reflecting a decrease of 1.9%[24] - Net earnings for the twelve months ended December 31, 2024, were $533.6 million, compared to $556.6 million in 2023, a decline of 4.1%[24] - Diluted earnings per share for Q4 2024 were $0.75, down from $0.92 in Q4 2023, representing a decrease of 18.5%[24] - Earnings Before Provision for Income Taxes (GAAP) for Q4 2024 was $145.1 million, down from $176.9 million in Q4 2023, representing a decrease of 17.5%[33] Segment Earnings - North America segment earnings for Q4 2024 were $147.9 million, down 12.3% from $169.0 million in Q4 2023[33] - Adjusted North America (non-GAAP) earnings for Q4 2024 were $154.2 million, down from $173.3 million in Q4 2023, a decrease of 11.8%[33] - Adjusted Rest of World (non-GAAP) earnings for Q4 2024 were $19.1 million, compared to $29.8 million in Q4 2023, reflecting a decline of 35.1%[33] Restructuring and Impairment - The company incurred pre-tax restructuring and impairment expenses of $11.3 million in the Rest of World segment and $6.3 million in the North America segment[36]