A.O. Smith (NYSE:AOS) delivered record earnings for fiscal 2025, overcoming stagnant sales volumes through improved pricing and operational efficiency.
The Milwaukee-based water technology leader reported fourth-quarter net income of $125.4 million, or $0.90 per share, surpassing the $0.84 analyst consensus.
However, quarterly revenue of $912.5 million narrowly missed the $923 million expected by Wall Street, reflecting a "flat" demand environment for residential water heaters.
For the full year, A.O. Smith achieved a record diluted EPS of $3.85, a 6% increase over 2024, on total revenue of $3.83 billion.
While the North America segment remained resilient, the "Rest of World" segment faced a 4% sales decline, primarily due to continued macroeconomic softness in the Chinese market.
Despite these volume headwinds, the company expanded its operating margin to 18% in the fourth quarter, up from 15.2% a year ago.
Looking ahead, A.O. Smith issued a 2026 guidance range that suggests modest growth.
The company expects full-year 2026 EPS to fall between $3.85 and $4.15, with revenue projected in the range of $3.9 billion to $4.02 billion.