| Metric | Value ($ M) | Q2 FY26 | Q3 FY25 |
|---|---|---|---|
| Revenue | 940.50 | 6.3% | 0.2% |
| Total Income | 940.50 | 6.3% | 0.2% |
| Expenditure | 766.10 | 8.6% | 0.1% |
| PBT | 166.70 | 5.5% | 3.0% |
| Net Profit | 126.30 | 1.1% | 4.3% |
| OPM | 18.54% | 2.00pp | 0.07pp |
| NPM | 13.43% | 0.99pp | 0.58pp |
| EPS | 0.93 | 2.2% | 1.1% |
A. O. Smith Reports Q3 2026 Results
29 Oct 2026 · 1d ago, 4:31 pm
Summary
A. O. Smith Corporation announced its third quarter 2026 results, reporting sales of $940.5 million and net earnings of $126.3 million, or $0.93 per diluted share. The North America segment saw a 3% sales increase driven by acquisitions and pricing, while the Rest of World segment experienced a 7% decline due to market challenges in China. The company also announced the sale of an 81% stake in its China business, which will lead to updated full-year guidance excluding China operations. Management highlighted disciplined execution and strategic focus on high-return opportunities.
Key Highlights
- 1
A. O. Smith reported third quarter 2026 sales of $941 million, with net earnings of $126 million and diluted earnings per share of $0.93.
- 2
North America segment sales increased by 3% to $761.6 million, driven by the Leonard Valve acquisition, boiler sales growth, and pricing actions, despite lower residential water heater volumes.
- 3
Rest of World segment sales decreased by 7% to $192.8 million, primarily due to continued weakness in China's consumer appliance market.
- 4
Year-to-date operating cash flow was $429 million and free cash flow increased by 4% to $396 million.
- 5
The company concluded a strategic assessment of its China business, agreeing to sell an 81% interest to CPE while retaining a 19% stake and a long-term brand license.
- 6
Full year 2026 guidance has been updated to exclude the China business, with projected net sales growth of approximately 4% and adjusted EPS between $3.42 and $3.52.
Management Comments
Steve Shafer
Disciplined execution across our businesses remained a priority in the third quarter as we navigated persistent inflationary pressures, softer residential water heater demand in North America, and ongoing market challenges in China. Our teams adapted to changing market conditions, managed costs and stayed focused on meeting our customers’ needs. Supported by our leading market positions and financial strength, we believe we remain well positioned to address near-term headwinds and deliver long-term, profitable growth. Separately, earlier this week we announced definitive agreements with CPE to acquire an 81% interest in our China business. Our team in China has built a leading premium brand over more than three decades, and CPE is well positioned to lead that business forward. For A. O. Smith, this transaction completes our strategic assessment and enables us to focus our capital and resources on our highest-return opportunities and sustainable value creation. At the same time, our retained 19% stake and long-term brand license give our shareholders the opportunity to benefit from future growth in China under CPE's leadership. Our updated guidance reflects a more focused A. O. Smith, and our teams are committed to finishing the year strong. Looking ahead, we are excited about the opportunities in front of us, from our leading North American water heating and boiler franchise to our growth platforms in water treatment, water management and India. By concentrating on where we win, we are well positioned to drive profitable growth and create long-term value for our shareholders.
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