A.O. Smith Beats Estimates on Top and Bottom Lines

A.O. Smith (NYSE: AOS  ) reported earnings on Jan. 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), A.O. Smith beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly, and GAAP earnings per share increased significantly.

Gross margins improved, operating margins grew, net margins contracted.

Revenue details
A.O. Smith booked revenue of $475.8 million. The 10 analysts polled by S&P Capital IQ anticipated a top line of $460.1 million. Sales were 29% higher than the prior-year quarter's $370.2 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.68. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.64 per share on the same basis. GAAP EPS of $3.91 for Q4 were 0.4% higher than the prior-year quarter's $0.69 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 32.6%, 120 basis points better than the prior-year quarter. Operating margin was 10.3%, 210 basis points better than the prior-year quarter. Net margin was 6.7%, 200 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $462.7 million. On the bottom line, the average EPS estimate is $0.61.

Next year's average estimate for revenue is $1.94 billion. The average EPS estimate is $2.83.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 145 members out of 149 rating the stock outperform, and four members rating it underperform. Among 51 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give A.O. Smith a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on A.O. Smith is outperform, with an average price target of $46.56.

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