AO Smith Q1 revenue dips 2% on weak US, China water heater demand

A. O. Smith posted a year on year fall in first quarter net sales on Tuesday, as prolonged inflation in the US and an economic slowdown in China hurt demand for its water heaters in the regions. 

The company is also bracing for a potential drag from US President Donald Trump's tariffs, which have fueled concerns about an economic slowdown and a decline in consumer sentiment. 

"Given the uncertainty of the tariff environment, our guidance does not include our announced pricing, which we project will offset, along with other actions, the current announced tariffs," said CFO Steve Shafer. 

The Milwaukee, Wisconsin-based company maintained its annual revenue forecast between $3.8 billion and $3.9 billion, as well as adjusted profit outlook in the range of $3.60 to $3.90 per share. 

The company, which makes residential and commercial water heaters, boilers, tanks and treatment products, posted a 2 per cent fall in quarterly sales to $963.9 million. 

Analysts on an average expected $954 million, according to data compiled by LSEG. 

Sales in its North America segment, which accounted for more than 77 per cent of its total annual sales in 2024, fell 2 per cent to $748.7 million. 

"In China, continued economic challenges and soft consumer demand led to a 4 per cent year-over-year decrease in local currency sales," said CEO Kevin Wheeler. 

Sales from rest of world segment, which includes China and India, were flat to last year. 

Net income for the quarter ended March 31, was $136.6 million, or 95 cents per share, compared with $147.6 million or $1 per share a year earlier.  (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)