A O Smith Q4 Earnings Beat Estimates, Registers 19% Sales Growth

A O Smith Corp AOS reported fourth-quarter net sales growth of 19% year-over-year to $995.5 million, beating the consensus of $962.3 million.
EPS improved 18% Y/Y to $0.87, beating the consensus of $0.77. The gross margin contracted 260 bps to 36.2%.
North America segment sales rose 27% to $714.8 million, driven by inflation-related price increases. The Rest of World segment sales improved 3% to $287.9 million, driven by a positive mix in water heaters and water treatment products in China.
The company held cash and equivalents of $631.4 million with total debt of $196.7 million.
A O Smith generated cash from operating activities for FY21 of $641.1 million, compared to $562.1 million a year ago. Free cash flow was $566 million.
The company repurchased ~5.09 million shares at $366.5 million in 2021 and expects to spend $400 million to repurchase shares in 2022.
FY22 Outlook: A O Smith expects sales of $4.105 billion -$4.175 billion, increasing 16% - 18% Y/Y, above the consensus of $4.01 billion. It expects an adjusted EPS of $3.35 - $3.55 versus the consensus of $3.53.
Price Action: AOS shares traded higher by 2.37% at $76.49 on the last check Thursday.

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