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A. O. Smith (NYSE: AOS) posts Q2 2026 results, trims EPS outlook

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

A. O. Smith Corporation reported Q2 2026 net sales of $1,004.3 million, down 1% year over year, and net earnings of $124.9 million, down 18%. Diluted EPS was $0.91 versus $1.07, while adjusted EPS, excluding $22.6 million of North America water treatment restructuring and impairment, was $1.03, down 4%.

North America sales rose 5% to $820.5 million, including a $16 million contribution from the Leonard Valve acquisition and strong boiler growth, but segment margin contracted to 21.6% (24.4% adjusted) from 25.4%. Rest of World sales fell 19% to $194.9 million, with China sales down 28% in local currency, reducing segment margin to 5.2%. The restructuring program in North America water treatment is projected to generate $6–$8 million of annual savings beginning in 2027.

Year-to-date operating cash flow increased 42% to $253.8 million and free cash flow rose 67% to $233.3 million. The company repurchased 2.6 million shares for $162.4 million in the first half, raised its 2026 share repurchase target to $300 million, and reported a debt-to-total-capitalization ratio of 25.7%. For 2026 it guides net sales of $3.9–$3.95 billion, diluted EPS of $3.60–$3.75, and adjusted EPS of $3.70–$3.85, narrowing prior ranges amid soft residential water heater demand and ongoing weakness in China.

Positive

  • Free cash flow rose 67% year-to-date to $233.3 million, supported by a 42% increase in operating cash flow to $253.8 million.
  • The company increased its 2026 share repurchase target by 50% to $300 million, after buying back 2.6 million shares for $162.4 million in the first half.

Negative

  • Q2 2026 net earnings declined 18% year over year to $124.9 million, with diluted EPS down 15% to $0.91.
  • Rest of World sales fell 19% to $194.9 million, including a 28% local-currency decline in China, reducing segment margin to 5.2% from 10.5%.
  • 2026 diluted EPS guidance of $3.60–$3.75 is below 2025 EPS of $3.85, and the high end of adjusted EPS guidance was reduced from $4.00 to $3.85.

Filing Explained

A. O. Smith has completed its second-quarter report; repurchases are partly completed, while further buybacks and the dividend remain scheduled or authorized.

This Form 8-K reports A. O. Smith’s second-quarter results issued on July 30, 2026. The quarter is complete, but the full-year outlook remains conditional: the company narrowed its 2026 sales-growth and adjusted-EPS ranges, while its capital-allocation plans include a higher repurchase target and a scheduled dividend.

An 8-K reports specified material events; here, the event is the release of quarterly operating and financial results. The filing reports $181.3 million of cash and $637.5 million of debt at June 30, 2026, with the higher leverage attributed to borrowing under a term loan used for the Leonard Valve acquisition.

The company had already repurchased $162.4 million of stock, or 2.6 million shares, during the first half and retained authority to repurchase approximately 3.2 million additional shares. That authority is a capacity rather than a completed transaction, while the increased full-year repurchase target is a plan rather than additional shares already bought.

The board approved a $0.36-per-share quarterly cash dividend on July 13, 2026, for shareholders of record on July 31, 2026, payable on August 17, 2026. The 2026 guidance also excludes possible effects from future acquisitions, the assessment of the China business, and recently announced tariff-policy changes; those items remain unresolved in this filing.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Q2 2026 Net sales $1,004.3 million Quarter ended June 30, 2026; down 1% year over year
Q2 2026 Net earnings $124.9 million Quarter ended June 30, 2026; down 18% year over year
Q2 2026 Diluted EPS $0.91 Down from $1.07 in Q2 2025
Q2 2026 Adjusted EPS $1.03 Excludes $22.6 million of restructuring and impairment; down 4% year over year
Year-to-date free cash flow 2026 $233.3 million Six months ended June 30, 2026; up 67% versus prior-year period
Debt-to-total-capitalization ratio 25.7% As of June 30, 2026; reflects new term loan for Leonard Valve acquisition
2026 Net sales outlook $3.9–$3.95 billion Full-year 2026 guidance; implies 2%–3% sales growth
2026 Diluted EPS guidance $3.60–$3.75 Full-year 2026 outlook versus 2025 EPS of $3.85
free cash flow financial
"Free cash flow increased 67% to $233 million and free cash flow increased 67%"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
adjusted earnings per share financial
"adjusted earnings of $142 million1 and adjusted EPS of $1.031"
Adjusted Earnings Per Share shows how much profit a company makes for each share of stock, but it removes unusual or one-time items like big expenses or gains. This helps investors see the company's true ongoing performance, making it easier to compare how well different companies are doing over time.
organic sales growth financial
"North America segment organic growth excludes the impact of Leonard Valve"
Organic sales growth measures how much a company’s revenue rises from its regular business activity — like selling more products, charging higher prices, or selling to more customers — without counting money from buying other businesses or one-time currency effects. Investors watch it because it shows whether demand and the company’s core operations are genuinely getting stronger, similar to judging a garden by how much the plants you planted yourself are growing rather than by adding bought potted plants.
restructuring and impairment expenses financial
"exclude the impact of restructuring and impairment expenses associated with targeted restructuring"
Restructuring and impairment expenses are charges a company records when it reorganizes its operations (layoffs, closing facilities, or other one-time costs) and when assets lose value and must be written down. Think of it like cleaning out a garage: you pay to reorganize the space and throw away items that no longer work; those costs reduce reported profit now and can signal either short-term pain or long-term efficiency gains, so investors watch them to judge future cash flow and true earning power.
debt-to-total capitalization financial
"resulting in a leverage ratio of 25.7% as measured by total debt-to-total capitalization"
Net sales $1,004.3 million -1% YoY
Net earnings $124.9 million -18% YoY
Adjusted earnings $142.0 million -7% YoY
Diluted EPS $0.91 -15% YoY
Adjusted EPS $1.03 -4% YoY
Guidance

For full-year 2026, the company expects net sales of $3.9–$3.95 billion, diluted EPS of $3.60–$3.75, adjusted EPS of $3.70–$3.85, and sales growth between 2% and 3%.

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FAQ

How did A. O. Smith (AOS) perform financially in Q2 2026?
A. O. Smith reported Q2 2026 net sales of $1,004.3 million, down 1% year over year, and net earnings of $124.9 million, down 18%. Diluted EPS was $0.91, while adjusted EPS was $1.03, excluding restructuring and impairment costs.

What were A. O. Smith’s segment results in North America and Rest of World in Q2 2026?
North America sales grew 5% to $820.5 million, helped by Leonard Valve and boiler growth, with adjusted margin of 24.4%. Rest of World sales declined 19% to $194.9 million, and China sales fell 28% in local currency, cutting margin to 5.2%.

What is A. O. Smith’s 2026 sales and EPS guidance after this 8-K?
For 2026, the company projects net sales of $3.9–$3.95 billion, diluted EPS of $3.60–$3.75, and adjusted EPS of $3.70–$3.85. Sales growth is expected between 2% and 3%, reflecting softer residential water heater demand and China weakness.

How strong is A. O. Smith’s cash flow and capital return in 2026 so far?
Year-to-date, operating cash flow increased 42% to $253.8 million and free cash flow rose 67% to $233.3 million. The company repurchased 2.6 million shares for $162.4 million and raised its full-year share repurchase target to $300 million.

What restructuring actions did A. O. Smith (AOS) take in its North America water treatment business?
The company recorded $22.6 million of restructuring and impairment expenses in Q2 2026 tied to North America water treatment. These actions aim to improve profitability through footprint optimization and brand rationalization and are projected to yield $6–$8 million in annual savings starting in 2027.

How has A. O. Smith’s balance sheet changed with the Leonard Valve acquisition?
At June 30, 2026, A. O. Smith had $181.3 million of cash and $637.5 million of debt, for a debt-to-total-capitalization ratio of 25.7%. A new term loan used for the $470.0 million Leonard Valve acquisition contributed to the higher leverage.
0000091142FALSE00000911422026-07-302026-07-30



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
——————————————
FORM 8-K
——————————————
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2026
——————————————
A. O. Smith Corporation
(Exact name of registrant as specified in its charter)
——————————————
Delaware 1-475 39-0619790
(State or other jurisdiction
of incorporation)		 (Commission
File Number)		 (IRS Employer
Identification No.)

11270 West Park Place, Milwaukee, Wisconsin 53224
(Address of principal executive offices, including zip code)

(414) 359-4000
(Registrant’s telephone number)
——————————————
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)		Name of each exchange
on which registered
Common Stock (par value $1.00 per share)AOSNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐





Item 2.02.    Results of Operations and Financial Condition
On July 30, 2026, A. O. Smith Corporation (“the Company”) issued a news release announcing the Company’s results for the quarter ended June 30, 2026. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated by reference herein.


Item 9.01    Financial Statements and Exhibits
The following exhibit is being filed herewith:

(99.1)    News Release of A. O. Smith Corporation, dated July 30, 2026
104    Cover Page Interactive Data File (embedded with the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


A. O. SMITH CORPORATION
Date: July 30, 2026
By:/s/James F. Stern
James F. Stern
Executive Vice President, Corporate Development, Strategy and Secretary



Exhibit 99.1
aosmith.jpg
 
Media Relations:
 
Curt Selby
414-359-4191
curt.selby@aosmith.com
 
Investor Relations:
 
Helen Gurholt
414-359-4157
hgurholt@aosmith.com
FOR IMMEDIATE RELEASE
July 30, 2026

A. O. Smith Reports Second Quarter 2026 Results
Second Quarter 2026 Highlights
(Comparisons are year-over-year (“YoY”), unless otherwise noted)
•Sales of $1 billion; net earnings of $125 million and diluted earnings per share (EPS) of $0.91; adjusted earnings of $142 million1 and adjusted EPS of $1.031
•North America segment sales of $820.5 million increased 5% driven by the Leonard Valve acquisition, 21% boiler sales growth and carryover pricing actions, partially offset by lower residential water heater volumes
•Rest of World segment sales of $194.9 million decreased 19%, reflecting continued weakness in China's consumer appliance market
•Year-to-date operating cash flow increased 42% to $254 million and free cash flow increased 67% to $233 million
•2026 full year share repurchase target increased to $300 million
•2026 full year sales EPS guidance updated to
◦Sales growth of between 2% and 3%
◦Diluted EPS of between $3.60 and $3.75
◦Adjusted EPS of between $3.70 and $3.85
1Adjusted earnings and adjusted EPS exclude the impact of restructuring and impairment expenses associated with targeted restructuring actions taken in the North America water treatment business.
Milwaukee, Wis.— Global water technology company A. O. Smith Corporation (“the Company”) (NYSE: AOS) today announced its second quarter 2026 results.



Key Financial Metrics
Second Quarter
(in millions, except per share amounts)
Q2 2026Q2 2025% Change YoY
Net sales$1,004.3$1,011.3-1%
Net earnings$124.9$152.2-18%
Adjusted earnings
$142.02
$152.2-7%
Diluted earnings per share$0.91$1.07-15%
Adjusted earnings per share
$1.032
$1.07-4%
2Excludes North America water treatment pre-tax restructuring and impairment expenses of $22.6 million. See accompanying GAAP to Non-GAAP reconciliations
“Our team continued to execute well in the second quarter, demonstrating the resilience of the A. O. Smith team and our business model,” said Steve Shafer, chairman and chief executive officer. “While North America continued to face softer residential water heater demand, we are pleased with the progress we are making in our market share, as well as the strong growth in our boiler business. Operational excellence and delivering for our customers remained key priorities throughout the quarter. In China, we managed through a significantly weaker market environment and continue our strategic assessment of the business. We remain committed to disciplined execution and investing in opportunities that will strengthen our competitive position and drive long-term value creation.”
Segment-level Performance
North America
Second quarter sales increased 5% to $820.5 million, driven by higher boiler volumes, the benefits of carryover pricing and a $16 million sales contribution from Leonard Valve, acquired in January 2026, partially offset by lower residential water heater volumes. Excluding Leonard Valve, organic sales increased 3%.
Segment earnings were $177.2 million, and segment margin was 21.6% in the second quarter of 2026 compared to second quarter of 2025 segment earnings of $198.1 million and segment margin of 25.4%. Second quarter 2026 adjusted segment earnings and adjusted segment margin were $199.8 million and 24.4%, respectively, and exclude $22.6 million of restructuring and impairment expenses associated with a restructuring plan designed to improve profitability and accelerate growth through footprint optimization and brand rationalization in our North America water treatment business. Beginning in 2027, annual savings associated with these restructuring actions are projected to be approximately $6 million to $8 million. The year-over-year decrease in segment earnings and segment margin was primarily due to restructuring and impairment expenses. Adjusted segment earnings were slightly higher with a decrease in adjusted segment margin, primarily due to higher steel and other input costs largely offsetting realized pricing in the quarter.
Rest of World
Rest of World sales of $194.9 million decreased 19% compared to the prior year period and included a favorable currency translation impact of $6 million primarily related to sales in China. China sales decreased 28% in local currency due to continued weak consumer demand and a challenging market environment.
Segment earnings were $10.2 million, and segment margin was 5.2% in the second quarter of 2026, compared to segment earnings of $25.3 million and segment margin of 10.5% in the same period of 2025. The lower segment earnings and segment


margin compared to the prior year were primarily due to lower China sales volumes which were partially offset by continued cost management.
Balance Sheet, Liquidity and Capital Allocation
As of June 30, 2026, cash balances totaled $181.3 million and debt totaled $637.5 million, resulting in a leverage ratio of 25.7% as measured by total debt-to-total capitalization. The increased leverage ratio compared to 2025 was due to cash borrowed under a new term loan used to acquire Leonard Valve in January 2026.
Cash provided by operations was $253.8 million and free cash flow was $233.3 million in the first half of 2026, up 42% and 67%, respectively, versus the prior year period, primarily driven by working capital management that more than offset lower earnings.
As part of its commitment to return capital to shareholders, the Company deployed $162.4 million to repurchase 2.6 million shares in the first half of 2026. As of June 30, 2026, authority remained to repurchase approximately 3.2 million additional shares. Supported by strong cash flow performance in the first half of the year, the Company increased its full-year 2026 share repurchase target by 50% to $300 million from $200 million.
On July 13, 2026, the Company’s board of directors approved a quarterly cash dividend of $0.36 per share for shareholders of record on July 31, payable on August 17.
Outlook
2026 Outlook
(in millions, except per share amounts)
20252026 Outlook
ActualLow EndHigh End
Net sales$3,830$3,900$3,950
Diluted earnings per share$3.85$3.60$3.75
Adjusted earnings per share$3.85
$3.703
$3.853
3Excludes North America water treatment pre-tax restructuring and impairment expenses of approximately $20 million, of which $22.6 million was recognized in the second quarter. Anticipated proceeds from the sale of certain assets are expected to occur in late 2026. See accompanying GAAP to Non-GAAP reconciliations
Due to continued softness in residential water heater industry volumes, the Company narrowed its full-year 2026 sales growth outlook to a range of 2% to 3%, compared to its previous range of 2% to 4%. The Company also narrowed its full-year 2026 adjusted EPS outlook to be between $3.70 and $3.85, from $3.70 to $4.00.
Shafer concluded, “While residential water heater demand remains soft, we are confident in our business fundamentals, competitive position and ability to execute our strategy. Our strong cash flow generation underscores the resilience of our operating model and supports disciplined capital deployment, including our decision to increase the full-year share repurchase target by 50% as we continue returning value to shareholders.”
The Company’s guidance excludes the potential impacts from future acquisitions, any potential outcomes of the assessment of its China business and the potential impact of the recently announced changes in tariff policy.
A. O. Smith will host a webcasted conference call at 10:00 a.m. (Eastern Daylight Time) today. The call can be heard live on the Company’s website. An audio replay of the call will be available on the Company’s website after the live event. To access the archived audio replay, go to the “Investors” page and select the Second Quarter 2026 Earnings Call link.


To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. North America segment organic growth excludes the impact of Leonard Valve. Adjusted earnings, adjusted EPS and adjusted segment earnings exclude the impact of restructuring and impairment charges. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release.
Forward-looking Statements
This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook”, “confident” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: further softening in U.S. residential and commercial water heater demand; further weakening in North American residential or commercial construction or instability in the Company’s replacement markets; failure to realize the expected benefits of acquisitions or expected synergies; difficulties in predicting results of operations of an acquired business; negative impact to the Company’s businesses from international tariffs, including any new or increased tariffs that could also trigger retaliatory responses from other countries, as well as trade disputes and geopolitical differences, including the conflicts in Ukraine and the Middle East; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs, including the recent volatility in fuel and other material prices; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; uncertain outcomes and costs and other potential impacts of the Company’s assessment relating to the Company’s China business; the failure to realize the expected benefits of restructuring actions; further weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; failure to realize the expected benefits, timing and extent of regulatory changes; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company’s filings with Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements.



About A. O. Smith
A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as a manufacturer of water treatment and water management products. For more information, visit www.aosmith.com.
SOURCE: A. O. Smith Corporation
###


A. O. SMITH CORPORATION
Condensed Consolidated Statement of Earnings
(dollars in millions, except share data)
(unaudited)
 
Three Months Ended
June 30,		Six Months Ended
June 30,
 2026202520262025
Net sales$1,004.3 $1,011.3 $1,949.9 $1,975.2 
Cost of products sold616.5 614.2 1,196.4 1,202.7 
Gross profit387.8 397.1 753.5 772.5 
Selling, general and administrative expenses197.7 191.3 401.6 383.9 
Restructuring and impairment expenses22.6 — 22.6 — 
Interest expense8.1 4.6 15.2 7.5 
Other expense (income), net1.4 (0.4)1.4 (1.6)
Earnings before provision for income taxes158.0 201.6 312.7 382.7 
Provision for income taxes33.1 49.4 69.8 93.9 
Net earnings$124.9 $152.2 $242.9 $288.8 
Diluted earnings per share of common stock(1)
$0.91 $1.07 $1.75 $2.01 
Average common shares outstanding (000’s omitted)137,863 142,484 138,511 143,440 
(1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding.


A. O. SMITH CORPORATION
Condensed Consolidated Balance Sheet
(dollars in millions)
 
(Unaudited) June 30,
2026		December 31, 2025
ASSETS:
Cash and cash equivalents$181.3 $174.5 
Marketable securities— 18.7 
Receivables669.8 582.3 
Inventories482.7 479.3 
Other current assets55.5 36.7 
Total Current Assets1,389.3 1,291.5 
Net property, plant and equipment619.0 635.1 
Goodwill and other intangibles1,504.2 1,072.9 
Operating lease assets49.7 46.3 
Other assets82.3 97.0 
Total Assets$3,644.5 $3,142.8 
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Trade payables$525.7 $504.1 
Accrued payroll and benefits74.0 93.6 
Accrued liabilities160.9 147.5 
Product warranties71.6 75.0 
Debt due within one year39.5 42.3 
Total Current Liabilities871.7 862.5 
Long-term debt598.0 112.7 
Pension liabilities7.4 7.4 
Operating lease liabilities39.2 37.1 
Other liabilities286.3 265.1 
Stockholders’ equity1,841.9 1,858.0 
Total Liabilities and Stockholders’ Equity$3,644.5 $3,142.8 


A. O. SMITH CORPORATION
Condensed Consolidated Statement of Cash Flows
(dollars in millions)
(unaudited)
 
Six Months Ended
June 30,
 20262025
Operating Activities
Net earnings$242.9 $288.8 
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation & amortization48.5 41.2 
Share based compensation expense9.3 8.6 
Deferred income taxes25.1 (9.1)
Non cash impairment12.4 — 
Net changes in operating assets and liabilities:
Current assets and liabilities(97.1)(159.0)
Noncurrent assets and liabilities12.7 7.8 
Cash Provided by Operating Activities253.8 178.3 
Investing Activities
Capital expenditures(20.5)(38.4)
Acquisitions(470.0)— 
Investment in marketable securities— (22.6)
Net proceeds from sale of marketable securities18.7 59.2 
Cash Used in Investing Activities(471.8)(1.8)
Financing Activities
Proceeds from debt819.0 611.3 
Repayments of debt(333.2)(503.1)
Common stock repurchases(162.4)(251.3)
Net payments from stock option activity— (0.5)
Dividends paid(99.8)(97.5)
Cash Provided by (Used in) Financing Activities223.6 (241.1)
Effect of exchange rate changes on cash and cash equivalents1.2 2.9 
Net increase (decrease) in cash and cash equivalents6.8 (61.7)
Cash and cash equivalents - beginning of period174.5 239.6 
Cash and Cash Equivalents - End of Period$181.3 $177.9 


A. O. SMITH CORPORATION
Business Segments
(dollars in millions)
(unaudited)
 
Three Months Ended
June 30,		Six Months Ended
June 30,
 2026202520262025
Net sales
North America$820.5 $779.0 $1,573.9 $1,527.7 
Rest of World194.9 240.1 395.6 466.8 
Inter-segment sales(11.1)(7.8)(19.6)(19.3)
$1,004.3 $1,011.3 $1,949.9 $1,975.2 
Earnings
North America(1)
$177.2 $198.1 $352.6 $383.3 
Rest of World
10.2 25.3 22.6 45.0 
Inter-segment earnings elimination— (0.2)— (0.2)
187.4 223.2 375.2 428.1 
Corporate expense(21.3)(17.0)(47.3)(37.9)
Interest expense(8.1)(4.6)(15.2)(7.5)
Earnings before income taxes158.0 201.6 312.7 382.7 
Provision for incomes taxes33.1 49.4 69.8 93.9 
Net earnings$124.9 $152.2 $242.9 $288.8 
Additional Information
(1) Adjustments: North America
includes restructuring and impairment of:$22.6 $— $22.6 $— 





A. O. SMITH CORPORATION
Adjusted Earnings and Adjusted Earnings Per Share
(dollars in millions, except per share data)
(unaudited)
The following is a reconciliation of net earnings and diluted earnings per share to adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP):
 
Three Months Ended
June 30,		Six Months Ended
June 30,
 2026202520262025
Net Earnings (GAAP)$124.9 $152.2 $242.9 $288.8 
Restructuring and impairment expenses, before tax22.6 — 22.6 — 
Tax effect on above items(5.5)— (5.5)— 
Adjusted Earnings (non-GAAP)$142.0 $152.2 $260.0 $288.8 
Diluted Earnings Per Share (GAAP)(1)
$0.91 $1.07 $1.75 $2.01 
Restructuring and impairment expenses, per diluted share, before tax0.16 — 0.16 — 
Tax effect on above items per diluted share(0.04)— (0.04)— 
Adjusted Earnings Per Share (non-GAAP)(1)
$1.03 $1.07 $1.87 $2.01 
(1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding.

A. O. SMITH CORPORATION
Sales Growth (Decline)
(unaudited)
The following table provides the components of net sales growth (decline):
Three Months Ended June 30, 2026
 North AmericaRest of WorldTotal
Sales Growth (Decline)5 %(19)%(1)%
     Acquisition Impact(1)
2 %— 1 %
     Foreign Exchange Impact— %3 %1 %
     Organic Sales Growth (Decline) (non-GAAP)3 %(22)%(3)%
Six Months Ended June 30, 2026
 North AmericaRest of WorldTotal
Sales Growth (Decline)3 %(15)%(1)%
     Acquisition Impact(1)
2 %— 2 %
     Foreign Exchange Impact— %3 %1 %
     Organic Sales Growth (Decline) (non-GAAP)1 %(18)%(4)%
(1) The acquisition effect includes the sales impact of the Leonard Valve acquisition in 2026.


A. O. SMITH CORPORATION
Adjusted Segment Earnings
(dollars in millions)
(unaudited)
The following is a reconciliation of reported earnings before provision for income taxes to total segment earnings (non-GAAP) and adjusted segment earnings (non-GAAP):
 
Three Months Ended
June 30,		Six Months Ended
June 30,
 2026202520262025
Earnings Before Provision for Income Taxes (GAAP)$158.0 $201.6 $312.7 $382.7 
Add: Corporate expense21.3 17.0 47.3 37.9 
Add: Interest expense8.1 4.6 15.2 7.5 
Total Segment Earnings (non-GAAP)$187.4 $223.2 $375.2 $428.1 
North America(1)
$177.2 $198.1 $352.6 $383.3 
Rest of World10.2 25.3 22.6 45.0 
Inter-segment earnings elimination— (0.2)— (0.2)
Total Segment Earnings (non-GAAP)$187.4 $223.2 $375.2 $428.1 
Additional Information
(1)North America Segment Earnings
$177.2 $198.1 $352.6 $383.3 
Restructuring and impairment expenses, before tax22.6 — 22.6 — 
Adjusted North America Segment Earnings (non-GAAP)$199.8 $198.1 $375.2 $383.3 

 


A. O. SMITH CORPORATION
Free Cash Flow
(dollars in millions)
(unaudited)

The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP):

Six Months Ended
June 30,
20262025
Cash provided by operating activities (GAAP)$253.8 $178.3 
Less: Capital expenditures(20.5)(38.4)
Free cash flow (non-GAAP)$233.3 $139.9 

A. O. SMITH CORPORATION
2026 Adjusted EPS Guidance and 2025 EPS
(unaudited)

The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax):

2026
Guidance		2025
Diluted EPS (GAAP)$3.60-3.75$3.85 
Restructuring and impairment expenses0.10 
(1)
— 
Adjusted EPS (non-GAAP)$3.70-3.85$3.85 
(1)Includes North America water treatment pre-tax restructuring and impairment expenses of approximately $20.0 million of which $22.6 million was recognized in the second quarter. Anticipated proceeds from the sale of certain assets are expected to occur in late 2026.



Source: View Original Filing on SEC EDGAR

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