A.O. Smith Q1 Profit Rises

(RTTNews) - A.O. Smith Corp. (AOS) reported first quarter 2015 net earnings of $58.4 million or $0.65 per share up from $46.7 million or $0.51 per share in the first quarter 2014. The prior year result included after-tax non-operating pension costs of $3.0 million or $0.03 per share.

Sales for the quarter grew 12 percent to $618.5 million from last year's $552.2 million, due to higher water heater and commercial boiler sales in North America and 15 percent growth in China.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.62 per share and revenues of $611.50 million for the quarter. Analysts' estimates typically exclude special items.

"Our North American results in the first quarter were quite strong. We expect water heater volumes in the second quarter will be negatively impacted by the customer pre-buy we experienced in the first quarter," said Ajita Rajendra, chairman and chief executive officer.

Lower volumes and approximately $4 million of incremental ERP costs contribute to its expectation that 2015 second quarter earnings per share will be about flat with 2014 second quarter earnings per share, after adding back $0.03 per share of non-operating pension costs to the 2014 earnings per share.

The company said it believes its commercial boiler sales will continue to grow at a double digit rate and expects its China sales will continue to increase at two times the rate of China GDP in 2015. As a result, it increased its EPS guidance for 2015. The company believes it will achieve full-year earnings of between $2.72 and $2.82 per share, which excludes the potential impact from future acquisitions.