Company: AOS
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0000091142-25-000100
Chunk: 34

Company: SMITH A O CORP
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 8
Chunk 34
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10.6 %9.6 %9.1 %

Sales in the Rest of World segment were $240.1 million in the second quarter of 2025, compared to $244.8 million in the second quarter of 2024. Sales in the first six months of 2025 were $466.8 million, or $4.9 million lower than sales of $471.7 million in the same period last year. Compared to the prior year quarter, the decrease in sales was primarily due to lower volumes of our residential water treatment and water heater products in China that were partially offset by incremental sales related to our 2024 acquisition of Pureit which added approximately $16 million in net sales. Our net sales decrease in the first six months of 2025 was due to lower volumes of our residential water treatment and water heater products in China that were partially offset by incremental sales related to our 2024 acquisition of Pureit which added approximately $28 million in net sales.

Rest of World segment earnings were $25.3 million in the second quarter of 2025, or $0.6 million lower compared to $25.9 million in the second quarter of 2024. Segment earnings in the first six months of 2025 were $45.0 million, an increase of $1.9 million compared to segment earnings of $43.1 million in the first six months of 2024. Segment margins were 10.5 percent and 10.6 percent in the second quarter of 2025 and 2024, respectively. Segment margins were 9.6 percent and 9.1 percent in the first six months of 2025 and 2024, respectively. The lower segment earnings and segment margin in the second quarter of 2025 compared to the prior quarter were primarily driven by lower volumes in China, which were partially offset by cost reduction actions. The higher segment earnings and segment margin in the first six months of 2025 compared to the prior year were primarily driven by cost reduction actions and benefits from our fourth quarter of 2024 restructuring actions which more than 

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offset lower volumes in China. We estimate our 2025 Rest of World segment margin will be approximately eight to nine percent.

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Outlook

We expect our consolidated sales in 2025 to increase between one and three percent compared to 2024. Our projection is driven by expected boiler sales growth of between four and six percent and flat industry residential and commercial volumes in North America