Water heating and treatment solutions company A.O. Smith (NYSE:AOS) will be announcing earnings results this Thursday before market open. Here’s what to look for.
A. O. Smith beat analysts’ revenue expectations by 1.1% last quarter, reporting revenues of $963.9 million, down 1.5% year on year. It was a strong quarter for the company, with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ organic revenue estimates.
Is A. O. Smith a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting A. O. Smith’s revenue to decline 2.4% year on year to $999.3 million, a reversal from the 6.6% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.99 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. A. O. Smith has missed Wall Street’s revenue estimates four times over the last two years.
Looking at A. O. Smith’s peers in the building products segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Insteel delivered year-on-year revenue growth of 23.4%, beating analysts’ expectations by 2.2%, and AZZ reported revenues up 2.1%, falling short of estimates by 3.2%. Insteel traded down 5.8% following the results while AZZ was up 5.2%.
Read our full analysis of Insteel’s results here and AZZ’s results here.
There has been positive sentiment among investors in the building products segment, with share prices up 7.9% on average over the last month. A. O. Smith is up 10.9% during the same time and is heading into earnings with an average analyst price target of $75.62 (compared to the current share price of $71.10).
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