A.O. Smith Corporation (NYSE:AOS) reported fourth-quarter results on Thursday that came in ahead of market expectations on earnings, even as revenue fell slightly short of forecasts.
The water technology group delivered earnings per share of $0.90 for the quarter, topping the consensus estimate of $0.84 by six cents. Shares were little changed following the release.
Quarterly revenue totaled $912.5 million, modestly below analysts’ expectations of $928.11 million. Sales were broadly flat year over year, but diluted EPS increased 20% compared with the same period last year, supported by pricing actions and improved profitability across both its North America and Rest of World businesses.
“I am pleased with the resilience and focus our team showed through the fourth quarter. The continued improvement in profitability and strength in the commercial water heater and boiler markets helped contribute to our record EPS in 2025,” said Steve Shafer, chief executive officer.
For the full year 2025, A.O. Smith reported record diluted earnings per share of $3.85, up 6% from 2024, while full-year revenue held steady at around $3.8 billion. Sales in North America edged higher, while revenue in the Rest of World segment declined 4%, largely reflecting weaker demand in China.
Looking ahead, the company issued guidance for 2026, forecasting revenue in the range of $3.9 billion to $4.02 billion and EPS between $3.85 and $4.15. The midpoint of the earnings outlook implies roughly 4% growth compared with 2025.
“We believe our strong balance sheet and free cash flow give us the flexibility to support organic growth, dividends and share repurchases while continuing to pursue strategic acquisitions to support our focus on portfolio management,” Shafer added.
A.O. Smith returned $597 million to shareholders through dividends and share buybacks during 2025 and said it expects to allocate around $200 million to share repurchases in 2026.