Sector: Industrials|Industry: Specialty Industrial Machinery|Market Cap: $9.99B|Employees: 12K
A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels, office buildings, laundries, car washes, and small businesses; boilers for hospitals, schools, hotels, and other large commercial buildings, as well as homes, apartments, and condominiums; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, and point-of-use carbon and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides commercial water treatment and filtration product; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce channels. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.
Net sales decreased by 1.27% year-over-year to $1,011.3 million in Q2 2025 and by 1.39% year-over-year to $1,975.2 million for the first six months, primarily driven by lower residential water heater volumes in North America and an 8% decline in China sales, partially offset by recent acquisitions.
Gross profit margin increased to 39.3% in Q2 2025 from 38.7% in Q2 2024, attributed to mix benefits in water treatment. However, net earnings for Q2 2025 decreased by 2.56% year-over-year to $152.2 million, impacted by higher selling, general, and administrative expenses and a significant 155.56% increase in interest expense.
Cash provided by operating activities increased by 8.72% year-over-year to $178.3 million for the first six months of 2025, and free cash flow improved to $139.9 million from $119.1 million in the prior year period. This indicates efficient cash conversion and management of working capital despite the revenue challenges.