A.O. Smith Slashes FY24 Guidance As China Woes And Weak Water Heater Sales Drag Q3 Performance
Portfolio Pulse from Lekha Gupta
A.O. Smith Corporation (NYSE:AOS) has lowered its FY24 guidance due to weak Q3 performance, primarily impacted by declining sales in China and North America's water heating segment. The company reported preliminary Q3 sales and EPS below estimates, leading to a significant drop in share price. Despite challenges, A.O. Smith expects improvement in North American water heater volumes in Q4, but anticipates continued softness in China. The company also announced a 6% dividend increase.
October 11, 2024 | 4:30 pm
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NEUTRAL IMPACT
Global X Clean Water ETF (AQWA) provides exposure to A.O. Smith, which has cut its FY24 guidance due to weak Q3 performance. The ETF may experience minor volatility due to A.O. Smith's challenges.
AQWA includes A.O. Smith, which has faced challenges leading to a guidance cut. While A.O. Smith's performance may cause some volatility, the ETF's diversified holdings mitigate significant impact.
CONFIDENCE 80
IMPORTANCE 40
RELEVANCE 30
NEUTRAL IMPACT
Tortoise Global Water ESG Fund (TBLU) includes A.O. Smith, which has reduced its FY24 guidance due to weak Q3 results. The fund might experience slight fluctuations due to A.O. Smith's performance.
TBLU holds A.O. Smith, which has faced a challenging Q3, leading to a guidance cut. The fund's diversified nature helps cushion against significant impact, though some fluctuations may occur.
CONFIDENCE 80
IMPORTANCE 40
RELEVANCE 30
NEGATIVE IMPACT
A.O. Smith's Q3 results fell short of expectations, leading to a cut in FY24 guidance. The company faces challenges in China and North America, impacting sales and EPS. Despite a 6% dividend increase, shares fell 6.81%.
A.O. Smith's Q3 performance was below expectations, leading to a reduction in FY24 guidance. The significant decline in sales in China and North America, coupled with a lower EPS forecast, has negatively impacted investor sentiment, resulting in a 6.81% drop in share price. The dividend increase is a positive note but does not offset the negative outlook.
CONFIDENCE 100
IMPORTANCE 90
RELEVANCE 100