A O Smith Clocks 12% Top-Line Growth In Q2; Cuts FY22 Sales Guidance

A O Smith Corp AOS reported second-quarter FY22 sales growth of 12% year-over-year to $966 million, beating the consensus of $962.26 million.
Adjusted EPS was $0.82 (+14% Y/Y), beating the consensus of $0.81.
Gross margin contracted 276 bps to 34.6%.
A O Smith generated cash from operating activities year-to-date of $54.4 million, compared to $196 million a year ago. Free cash flow of $23.7 million.
AOS repurchased 2.9 million shares for $190.4 million in the first six months of 2022.
The company held cash and marketable securities of $459.4 million with total debt of $298.4 million, resulting in a leverage ratio of 14.3% as of June 30, 2022.
FY22 Outlook: A O Smith expects sales of prior $3.96 billion -$4.035 billion (consensus $4.04 billion), down from the previous view of $4.030 billion -$4.105 billion. The company attributed the revised outlook to volume headwinds in the water heating business.
It continues to expect EPS of $1.56 - $1.76 and adjusted EPS of $3.35 - $3.55 (consensus $3.50).
Price Action: AOS shares are trading lower by 0.55% at $59.93 on the last check Thursday.

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