AOS · A. O. Smith Corporation

A. O. Smith’s first quarter 2026 results reflected a mixed operational performance, with North America resilience offsetting significant weakness in China. Consolidated sales declined 2% year-over-year to $945.6 million, while GAAP net earnings fell 14% to $118.0 million. The North America segment posted a 1% sales increase to $753.4 million, aided by the Leonard Valve acquisition and pricing actions, though results were tempered by weather-related disruptions at the Ashland City facility and softer residential water heater demand. Conversely, the Rest of World segment experienced an 11% sales decline, with China sales dropping 17% in local currency due to persistent weak consumer demand. Segment margins contracted in both regions, with North America falling to 23.3% and Rest of World dropping to 6.2%. The company generated strong operating cash flow of $129.4 million, significantly up from the prior year, driven by working capital management. Management revised the full-year 2026 outlook downward, narrowing sales growth guidance to 2%–4% and lowering adjusted EPS guidance to $3.70–$4.00, citing continued challenging conditions in China and regulatory uncertainty in North America. A $20 million pre-tax restructuring charge for the North America water treatment business is anticipated in the second quarter.