Core Insights - A. O. Smith Corporation (AOS) reported third-quarter 2025 adjusted earnings of 94 cents per share, exceeding the Zacks Consensus Estimate of 89 cents, marking a 15% year-over-year increase [1][8] - Net sales reached $942.5 million, surpassing the consensus estimate of $936 million, with a 4% year-over-year growth driven by higher water heater and boiler sales in North America [1][8] Segmental Performance - North America sales increased by 6% year-over-year to $742.8 million, outperforming the estimated $722.2 million, attributed to higher commercial water heater and boiler volumes [2] - Earnings from North America were $179.7 million, reflecting an 11% year-over-year increase [2] - Sales in the Rest of the World segment totaled $207.9 million, down 1% year-over-year, with China sales decreasing by 12%, while organic sales in India grew by 13% [3] - The Rest of the World segment's earnings rose by 13.2% year-over-year to $15.4 million due to cost reduction measures [3] Financial Metrics - A. O. Smith's cost of sales was $578.0 million, up 2.2% year-over-year, while selling, general, and administrative expenses increased by 7% to $188.9 million [4] - Gross profit increased by 8.1% year-over-year to $364.5 million, resulting in a gross margin of 38.7%, up from 37.4% in the previous year [4] - Interest expenses rose to $3.6 million from $1.5 million in the year-ago quarter [4] Liquidity and Cash Flow - As of September 30, 2025, cash and cash equivalents totaled $152.7 million, down from $239.6 million at the end of December 2024 [5] - Long-term debt decreased to $166.8 million from $183.2 million at the end of December 2024 [5] - Cash provided by operating activities for the first nine months of 2025 was $433.7 million, compared to $359.9 million in the same period last year [5] Share Repurchase Activity - In the first nine months of 2025, A. O. Smith repurchased 5 million shares for $335.4 million, with approximately 1.8 million shares remaining under the current repurchase authorization as of September 2025 [6] 2025 Outlook - A. O. Smith updated its 2025 sales outlook, now expecting net sales in the range of $3.50-$3.80 billion, down from the previous estimate of $3.85-$3.93 billion [9] - The company projects adjusted earnings per share (EPS) to be between $3.70-$3.85, slightly revised from the earlier expectation of $3.70-$3.90 [9]