Company: AOS
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000091142-25-000075
Chunk: 38

Company: SMITH A O CORP
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 2
Chunk 38
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4. 2024 residential industry unit volumes were flat compared to the prior year and we project 2025 industry residential unit volumes will be flat as well. We anticipate that commercial water heater industry volumes will also be approximately flat in 2025 after minimal growth in 2024. In response to higher steel and other input costs, including tariffs, we announced price increases on most of our water heater and boiler products. We expect our boiler sales to grow between three and five percent in 2025 compared to 2024 as we continue to benefit from the transition to higher efficiency boilers. We anticipate sales of our North America water treatment products will be between $235 million and $245 million, a year-over-year decrease of approximately five percent as we de-emphasize certain channels and focus on our more profitable channels.

In our Rest of World segment, our first quarter 2025 third-party sales in China declined four percent due to continued weak consumer demand. In 2025, we project our third-party sales in China to decrease between five to eight percent in local currency compared to 2024 as we expect consumer demand softness will persist in 2025. 

Combining all of these factors, we expect our 2025 consolidated sales to be approximately flat to up two percent compared to 2024. 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 through the date of this filing. In addition to pricing, our other actions include footprint optimization, strategic sourcing actions and other cost containment initiatives. Our guidance also excludes the impacts from potential future acquisitions.

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Table of Contents

Results of Operations

(dollars in millions)Three Months EndedMarch 31,20252024Net sales$963.9 $978.8 Cost of products sold588.5 594.1 Gross profit375.4 384.7 Gross profit margin %38.9 %39.3 %Selling, general and administrative expenses192.6 192.2 Interest expense2.9 1.0 Other income, net(1.2)(1.2)Earnings before provision for income taxes181.1 192.7 Provision for income taxes44.5 45.1 Net Earnings$136.6 $147.6 

Our sales in the first quarter of 2025 were $963.9 million, and lower than the first quarter