A.O. Smith issues profit warning on soft residential volumes

A. O. Smith Corp. AOS, -0.55% shares fell 6.4% in premarket trades on Thursday after the water heater maker lowered its sales and profit targets in the face of softness in North America industry volume. The Milwaukee company now expects adjusted third-quarter profit of 69 cents a share and sales of $874 million. Wall Street analysts currently expect the company to earn 88 cents a share on revenue of $974.5 million, according to data provider FactSet. A.O. Smith also cut its 2022 adjusted earnings per share guidance to $3.05 a share to $3.15 a share, compared to prior guidance of $3.35 to $3.55 a share. Analysts are currently projecting earnings of $3.44 a share for the year. A.O. Smith also reduced its 2022 residential water heater industry guidance to be down about 12.5%. Separately, A.O. Smith said it would increase its dividend by 7% to 30 cents a share. Shareholders as of Oct. 31 will be paid the dividend on Nov. 15.