(Reuters) – Water heater maker A. O. Smith forecast full-year profit below estimates and also missed fourth-quarter profit expectations on Thursday, hurt by lower sales of its water heaters in North America and China.
A combination of job insecurity, a prolonged housing downturn, debt and tariff threats from U.S. President Donald Trump has weakened consumer demand in China, impacting the company’s sales.
“A. O. Smith’s 2024 sales declined due to a weak economy in China continuing to negatively impact consumer demand and soft North America water heater demand in the second half of the year,” said CEO Kevin J. Wheeler.
The company forecast 2025 adjusted profit between $3.60 and $3.90 per share, missing analysts’ estimates of $4.03 according to data compiled by LSEG.
Shares of the company, which makes residential and commercial water treatment products, were down 2.7% before the bell.
Sales in the company’s international segment fell above 4% to $918.6 million in 2024, primarily due to weak demand in China. The segment accounted for 25% of its total sales in 2023.
The Milwaukee, Wisconsin-based company has also been hit by slow recovery in the residential housing market in the United States.
A. O. Smith reported adjusted earnings of 85 cents per share for the quarter ended Dec. 31, down 12% from a year earlier.
Its overall revenue fell about 8% to $912.40 million for the quarter, below analysts’ average expectation of $953.93 million.
(Reporting by Kannaki Deka and Rupali Chaudhary in Bengaluru; Editing by Krishna Chandra Eluri)
Comments