Company: AOS
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000091142-25-000075
Chunk: 39

Company: SMITH A O CORP
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 2
Chunk 39
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 of 2024 sales of $978.8 million. Compared to the prior year quarter, our net sales decrease was primarily driven by lower residential and commercial water heater volumes in North America, lower sales in China, and an unfavorable currency translation of approximately $7 million due to the depreciation of foreign currencies compared to the U.S. dollar, which more than offset our higher sales of boilers and incremental sales related to the 2024 acquisition of Pureit that added approximately $12 million in the first quarter. 

Our gross profit margin in the first quarter of 2025 was 38.9 percent, down compared to 39.3 percent in the first quarter of 2024. The decrease in gross profit margin was primarily due to lower sales volumes.

Selling, general, and administrative (SG&A) expenses in the first quarter of 2025 were essentially flat compared to the first quarter of 2024. 

Interest expense in the first quarter of 2025 was $2.9 million compared to $1.0 million in the same period last year. The increase in interest expense in the first quarter of 2025 was primarily due to higher debt levels.

Other income, net was $1.2 million in the first quarter of 2025 and flat to the first quarter of 2024. 

Our effective income tax rate for the three months ended March 31, 2025 was 24.6 percent. The effective income tax rate for the three months ended March 31, 2024 was 23.4 percent. The change in the effective income tax rate for the three months ended March 31, 2025 compared to the prior year quarter was primarily due to a change in geographical earnings mix. We estimate that our annual effective income tax rate for the full year of 2025 will be approximately 24 to 24.5 percent.

19

North America Segment

(dollars in millions)Three Months EndedMarch 31,20252024Net Sales$748.7 $766.3 Segment Earnings185.2 198.7 Segment margin24.7 %25.9 %

Sales in our North America segment were $748.7 million in the first quarter of 2025, or $17.6 million lower than sales of $766.3 million in the first quarter of 2024. Compared to the prior year quarter, our net sales decrease was driven by lower residential and commercial water heater volumes, which more than offset our higher boiler