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A.O. Smith forecasts annual profit below estimates on weak water heater demand
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A.O. Smith forecasts annual profit below estimates on weak water heater demand
Jan 30, 2025 5:51 AM

Jan 30 (Reuters) - Water heater maker A. O. Smith ( AOS )

forecast full-year profit below estimates and also

missed fourth-quarter profit expectations on Thursday, hurt by

lower sales of its water heaters in North America and China.

A combination of job insecurity, a prolonged housing

downturn, debt and tariff threats from U.S. President Donald

Trump has weakened consumer demand in China, impacting the

company's sales.

"A. O. Smith's ( AOS ) 2024 sales declined due to a weak economy in

China continuing to negatively impact consumer demand and soft

North America water heater demand in the second half of the

year," said CEO Kevin J. Wheeler.

The company forecast 2025 adjusted profit between $3.60 and

$3.90 per share, missing analysts' estimates of $4.03 according

to data compiled by LSEG.

Shares of the company, which makes residential and

commercial water treatment products, were down 2.7% before the

bell.

Sales in the company's international segment fell above 4%

to $918.6 million in 2024, primarily due to weak demand in

China. The segment accounted for 25% of its total sales in 2023.

The Milwaukee, Wisconsin-based company has also been hit by

slow recovery in the residential housing market in the United

States.

A. O. Smith ( AOS ) reported adjusted earnings of 85 cents per share

for the quarter ended Dec. 31, down 12% from a year earlier.

Its overall revenue fell about 8% to $912.40 million for the

quarter, below analysts' average expectation of $953.93 million.

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