Company: AOS
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000091142-25-000150
Chunk: 45

Company: SMITH A O CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 45
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 up compared to the gross profit margin of 38.5 percent in the first nine months of 2024. The increases in gross profit margin in the third quarter and first nine months were primarily driven by the benefits of pricing actions implemented earlier this year to address increased input costs in North America.

Selling, general, and administrative (SG&A) expenses in the third quarter of 2025 increased $12.3 million compared to the third quarter of 2024. SG&A expenses increased $15.5 million in the first nine months of 2025 compared to the prior year. The increases in SG&A expenses in the third quarter and first nine months of 2025 compared to the prior year periods were primarily due to higher employee costs, partially offset by benefits of our 2024 China restructuring actions. 

Interest expense in the third quarter of 2025 was $3.6 million compared to $1.5 million in the same period last year.  Interest expense in the first nine months of 2025 was $11.1 million compared to $4.3 million in the same period the previous year. The increase in interest expense in the third quarter and first nine months of 2025 was primarily due to higher debt levels.

Other expense (income), net for the third quarter of 2025 was expense of $0.2 million, compared to expense of $2.6 million for the third quarter of 2024. Other expense (income), net for the first nine months of 2025 was income of $1.4 million compared to expense of  $0.5 million in the same period last year. The change in Other expense (income), net in the third quarter of 2025 was primarily due to lower foreign currency translation losses and lower interest income. The change in Other expense (income), net in the first nine months of 2025 was primarily due to lower foreign currency translation losses.

Our effective income tax rate for the three and nine months ended September 30, 2025 was 23.2 percent and 24.1 percent, respectively. The effective income tax rate for the three and nine months ended September 30, 2024 was 23.3 percent and 23.7 percent, respectively. The change in the effective income tax rate for the three and nine months ended September 30, 2025 compared to the effective income tax rate for the three and nine months ended September 30, 2024 was primarily due to the geographical earnings mix