A. O. Smith Profit Tops Estimates, Lifts Outlook; Stock Up - Update

(RTTNews) - Water heater maker A. O. Smith Corp. (AOS), Monday reported a higher third-quarter profit as growing home construction boosted demand for its products with replacement sales chipping in. Both earnings and revenues for the quarter topped Wall Street estimates.

Citing salubrious business conditions in key markets, the company raised its earnings guidance for 2013. Shares of the company gained about six percent on the New York Stock Exchange.

"A. O. Smith continued to benefit from improvement in several key sectors of the economy in the U.S.," CEO Ajita Rajendra said.

The Milwaukee, Wisconsin-based company posted third-quarter net earnings of $46 million or $0.50 per share, compared with $37 million or $0.40 per share last year.

Excluding items, adjusted earnings for the quarter were $50 million or $0.54 per share, compared with $34 million or $0.37 per share a year ago.

On average, 11 analysts polled by Thomson Reuters expected earnings of $0.44 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the third quarter grew 16 percent to $536 million from 462 million in the prior year. Analysts on consensus anticipated revenues of $509.77 million for the quarter.

Among regions, North American sales were up 10 percent and rest of the world jumped 31 percent, with strong growth in China.

Results were also helped by about $3 million of higher income tax benefits than estimated.

For fiscal year 2013, A. O. Smith now expect net earnings in the range of $1.78 to $1.82 per share and adjusted earnings of $2.00 to $2.04 per share. The company had earlier estimated net earnings of $1.62 to $1.68 per share and adjusted earnings of $1.84 to $1.90 per share.

Analysts currently expect earnings of $1.94 per share for 2013.

In the prior year, the company reported net earnings of $1.75 per share and adjusted earnings of $1.56 per share.

A. O. Smith shares are currently trading at $49.50, up $2.75 or 5.88%, on a volume of 0.7 million shares. In the past 52 weeks, the stock traded in the range of $28.53 - $51.06.