A.O. Smith Corp reported quarterly adjusted earnings that missed Wall Street estimates, hurt by lower sales of residential and commercial water heaters in the United States, but the company raised its full-year earnings view.
We expect U.S. volumes will recover and a pre-buy of commercial water heaters by our Southern California customers will occur in the fourth quarter as a result of an air quality regulatory standard scheduled to take effect on January 1, 2012, the company said in a statement.
The water heater maker, valued at about $1.5 billion, expects full-year earnings of $2-$2.10 a share.
Analysts, on average, were expecting earnings of $2.11 a share, according to Thomson Reuters I/B/E/S.
AO Smith, which in July said it would acquire privately held rival Lochinvar Corp for about $418 million, said it now sees the deal to add about $0.04 a share.
The Milwaukee, Wisconsin-based company posted earnings from continuing operations of $26.9 million, or 58 cents a share, compared with $16.2 million, or 35 cents, a year earlier.
On an adjusted basis, it earned 39 cents a share.
Revenue for AO Smith, which competes with Corning and Eaton , rose to $412 million from $377.4 million .
Fears of a double-dip recession throughout the summer along with the ongoing softness in the new housing and commercial construction markets had an adverse effect on our U.S. water heater business, Chief Executive Paul Jones said.
Analysts expected third-quarter earnings of $0.47 a share on sales of $403.5 million.
Shares of the company closed at $32.75 on Thursday on the New York Stock Exchange.