A. O. Smith(US:AOS) Prnewswireยท2025-01-30 11:55Core Insights - A. O. Smith Corporation reported a decline in net sales and earnings for the full year and fourth quarter of 2024, primarily due to weak consumer demand in China and soft water heater demand in North America [1][2][3] - The company faced challenges with restructuring and impairment expenses, impacting earnings per share [2][3] - Despite these challenges, A. O. Smith remains focused on optimizing its business and investing for future growth, including the acquisition of Pureit [2][3] Financial Performance - Full Year 2024: - Net sales decreased by 1% to $3,818 million from $3,853 million in 2023 [2] - Net earnings fell by 4% to $533.6 million, with diluted earnings per share down 2% to $3.63 [2][3] - Adjusted earnings also decreased by 5% to $548.0 million, with adjusted earnings per share at $3.73 [2][3] - Fourth Quarter 2024: - Net sales were $912.4 million, an 8% decrease from $988.1 million in Q4 2023 [2] - Net earnings dropped by 20% to $109.7 million, with diluted earnings per share down 18% to $0.75 [2][3] - Adjusted earnings for the quarter were $124.1 million, a 14% decrease from $144.4 million in Q4 2023 [2][3] Segment Performance - North America: - Full year sales were $3.8 billion, a decrease of 1% primarily due to lower sales in China [3] - Segment earnings were $707.5 million with a margin of 24.0%, down from $726.7 million and 24.9% in 2023 [5] - Rest of World: - Sales decreased by 4% to $918.6 million, impacted by unfavorable currency translation and lower volumes in China [8][9] - Segment earnings fell to $64.5 million with a margin of 7.0%, down from $83.4 million and 8.7% in 2023 [9] Balance Sheet and Capital Allocation - As of December 31, 2024, cash and marketable securities totaled $276.1 million, with total debt at $193.2 million [12] - The company returned $496 million to shareholders through dividends and share repurchases in 2024 [3][13] - A. O. Smith repurchased 3.8 million shares at a cost of $305.8 million, with plans to increase repurchases to approximately $400 million in 2025 [13][17] 2025 Outlook - The company projects flat to 2% growth in consolidated sales for 2025, with diluted earnings per share expected between $3.60 and $3.90 [16][17] - Anticipated challenges include a single-digit sales decline in China and flat water heater industry unit volumes in North America [16][17]