Adjusted EPS was $1.01, beating the consensus of $0.91.

"A. O. Smith delivered record earnings performance in the second quarter driven by lower year-over-year steel costs and continued strength in demand for our North America commercial and residential water heater products," noted Kevin J. Wheeler, chairman, and chief executive officer. 

Segment Details: North American sales fell 3% Y/Y to $722.3 million. Rest of World sales of $244.2 million rose 6% Y/Y.

Gross profit rose 15% to $384.7 million.

As of June 30, 2023, cash and marketable securities balances totaled $409.7 million, and debt totaled $206 million, resulting in a leverage ratio of 9.8% as measured by total debt-to-total capitalization.

"We will face higher steel costs in North America in the back half of 2023; therefore, we will see some margin pressure," noted Kevin J. Wheeler. 

The company expects adjusted EPS of $3.45-$3.60, compared to prior guidance of $3.30-$3.50 (consensus $3.50). 

Price Action: AOS shares are trading lower by 0.57% at $74.64 on the last check Thursday.