| Metric | Value ($ M) | Q1 FY26 | Q2 FY25 |
|---|---|---|---|
| Revenue | 1.0K | 6.2% | 0.7% |
| Total Income | 1.0K | 6.2% | 0.7% |
| Expenditure | 838.20 | 6.9% | 4.1% |
| PBT | 158.00 | 2.1% | 21.6% |
| Net Profit | 124.90 | 5.8% | 17.9% |
| OPM | 16.54% | 0.57pp | 3.85pp |
| NPM | 12.44% | 0.04pp | 2.61pp |
| EPS | 0.91 | 7.1% | 14.9% |
A. O. Smith Reports Q2 2026 Net Sales of $1 Billion, Diluted EPS of $0.91
30 Jul 2026 · 30 Jul, 4:32 pm
Summary
A. O. Smith Corporation reported a slight year-over-year decline in second quarter 2026 net sales to $1,004.3 million, with net earnings falling 18% to $124.9 million and diluted EPS at $0.91. While the North America segment showed resilience with a 5% sales increase, the Rest of World segment experienced a 19% decrease, largely due to a challenging market in China. Despite softer residential water heater demand, the company demonstrated strong financial management, with year-to-date operating cash flow surging 42% to $254 million and free cash flow up 67% to $233 million. Management expressed confidence in the business fundamentals and competitive position, increasing the full-year share repurchase target to $300 million and narrowing the full-year adjusted EPS guidance to between $3.70 and $3.85.
Key Highlights
- 1
A. O. Smith Corporation reported second quarter 2026 net sales of $1,004.3 million, a 1% decrease year-over-year.
- 2
Net earnings for Q2 2026 were $124.9 million, representing an 18% decline compared to the prior year, with diluted earnings per share at $0.91.
- 3
North America segment sales increased by 5% to $820.5 million, driven by the Leonard Valve acquisition, 21% boiler sales growth, and carryover pricing actions.
- 4
Rest of World segment sales decreased by 19% to $194.9 million, primarily reflecting continued weakness in China's consumer appliance market.
- 5
Year-to-date operating cash flow significantly increased by 42% to $254 million, and free cash flow rose by 67% to $233 million.
- 6
The company increased its full-year 2026 share repurchase target by 50% to $300 million, supported by strong cash flow performance.
- 7
Full-year 2026 adjusted EPS guidance was narrowed to between $3.70 and $3.85, with sales growth projected between 2% and 3%.
Management Comments
Steve Shafer
Our team continued to execute well in the second quarter, demonstrating the resilience of the A. O. Smith team and our business model. While North America continued to face softer residential water heater demand, we are pleased with the progress we are making in our market share, as well as the strong growth in our boiler business. Operational excellence and delivering for our customers remained key priorities throughout the quarter. In China, we managed through a significantly weaker market environment and continue our strategic assessment of the business. We remain committed to disciplined execution and investing in opportunities that will strengthen our competitive position and drive long-term value creation. While residential water heater demand remains soft, we are confident in our business fundamentals, competitive position and ability to execute our strategy. Our strong cash flow generation underscores the resilience of our operating model and supports disciplined capital deployment, including our decision to increase the full-year share repurchase target by 50% as we continue returning value to shareholders.
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