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AO Smith Beats Up on Analysts Yet Again

By Seth Jayson - Updated Apr 10, 2017 at 1:43PM

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Just the facts, Fool.

AO Smith (NYSE: AOS) reported earnings on April 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), AO Smith met expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share dropped. GAAP earnings per share shrank significantly.

Gross margins increased, operating margins expanded, net margins contracted.

Revenue details
AO Smith recorded revenue of $509.6 million. The 11 analysts polled by S&P Capital IQ expected a top line of $507.8 million on the same basis. GAAP reported sales were 8.7% higher than the prior-year quarter's $468.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.96. The 13 earnings estimates compiled by S&P Capital IQ anticipated $0.77 per share. Non-GAAP EPS of $0.96 for Q1 were 5.9% lower than the prior-year quarter's $1.02 per share. GAAP EPS of $0.84 for Q1 were 18% lower than the prior-year quarter's $1.02 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 35.2%, 340 basis points better than the prior-year quarter. Operating margin was 11.6%, 230 basis points better than the prior-year quarter. Net margin was 7.7%, 240 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $520.3 million. On the bottom line, the average EPS estimate is $0.86.

Next year's average estimate for revenue is $2.10 billion. The average EPS estimate is $3.46.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 169 members out of 174 rating the stock outperform, and five members rating it underperform. Among 48 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 47 give AO Smith a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on AO Smith is outperform, with an average price target of $71.50.

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Stocks Mentioned

A. O. Smith Corporation Stock Quote
A. O. Smith Corporation
AOS
$58.35 (-0.03%) $0.02

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