A. O. Smith stock dips after guidance cut

Shares of A. O. Smith (NYSE:AOS) fell 11% Friday morning after the water technology company cut its full-year outlook, citing softness in China.

The company now expects full year EPS in the range of $3.70 and $3.85 (consensus estimate: $4.06), compared to prior guidance of $3.95 to $4.10, and sales to be approximately flat year-over-year ($3.8B-$3.9B).

A. O. Smith (AOS) also reported preliminary third quarter sales of $903M, down 4% Y/Y due to lower sales in China and North America water heating.

In North America, prelim Q3 sales of $703M were slightly below 2023 sales of $710M as pricing benefits and higher boiler and water treatment volumes in North America were offset by lower volumes of residential and commercial water heaters in North America.

Meanwhile, in China, local currency third-party sales fell 17% in 2024, primarily due to lower volumes of core water heating and water treatment products.

While the company expects quarter-over-quarter improvement in North America water heater volumes in the fourth quarter, it sees softness in China to persist through the remainder of 2024.

A. O. Smith (AOS) will release final financial results for the third quarter on Oct. 22, 2024.