A. O. Smith(US:AOS)2025-10-28 10:57Financial Performance - A. O. Smith reported third quarter 2025 net sales of $942.5 million, a 4% increase compared to $902.6 million in Q3 2024[2] - Net earnings for the third quarter increased by 10% to $132 million, with diluted earnings per share rising 15% to $0.94[3] - North America sales grew 6%, with an operating margin expansion of 110 basis points to 24.2%[3] - The company experienced a 12% decline in local currency sales in China, contributing to a 1% decrease in the Rest of World segment[3] - Net earnings for the nine months ended September 30, 2025, were $420.8 million, a slight decrease from $423.9 million in the same period of 2024[27] - Earnings before income taxes for the nine months ended September 30, 2025, were $554.5 million, slightly down from $555.9 million in 2024[27] Cash Flow and Capital Expenditures - Cash provided by operations increased by 21% to $434 million, while free cash flow grew 35% to $381 million in the first nine months of 2025[3] - Cash provided by operating activities increased to $433.7 million for the nine months ended September 30, 2025, compared to $359.9 million in 2024, representing a growth of approximately 20.5%[28] - Free cash flow for the nine months ended September 30, 2025, was $380.5 million, up from $282.5 million in 2024, indicating a significant increase of 34.7%[28] - Capital expenditures for the nine months ended September 30, 2025, were $53.2 million, a decrease from $77.4 million in 2024, reflecting a reduction of approximately 31.2%[28] Shareholder Returns - A. O. Smith repurchased 5 million shares for $335.4 million in the first nine months of 2025, with an expected total of approximately $400 million for the year[11] - The company approved a 6% increase in the dividend rate, marking over 30 consecutive years of dividend increases[12] - The company repurchased $335.4 million in common stock during the nine months ended September 30, 2025, compared to $237.1 million in 2024, representing an increase of 41.5%[25] Financial Position - As of September 30, 2025, total cash and marketable securities were $172.8 million, with total debt at $185.8 million, resulting in a leverage ratio of 9.2%[9] - The total cash and cash equivalents at the end of the period were $152.7 million, down from $219.3 million at the end of September 2024[25] Guidance and Outlook - The full year 2025 sales outlook has been adjusted to a range of flat to up 1%, with diluted EPS guidance narrowed to $3.70 to $3.85[3] - The company reported a diluted EPS guidance for 2025 of $3.70-3.85, compared to an adjusted EPS of $3.73 for 2024[30]