AI-extracted from the 10-Q filed 2026-07-30 — Q2 FY2026 (quarter ended June 30, 2026). Every figure is machine-verified against the filing text on SEC EDGAR.
Net sales slipped 1% YoY to $1,004.3M as a 5% North America gain (aided by the Leonard Valve acquisition) was offset by a 19% Rest of World decline, including a 28% local-currency drop in China.
Biggest Revenue Drivers
North America$816.3M+5% YoY
Driven by 2025 pricing actions, ~$16M from the Leonard Valve acquisition, and higher boiler volumes, partly offset by lower residential water heater volumes.
Rest of World$188.0M-19% YoY
Lower sales in China due to continued weak consumer demand, partially offset by favorable foreign currency translation of ~$6M.
Biggest Revenue Drivers
Total revenue: $1,004.3M-1% YoY
North America$816.3M+5% YoY
Driven by 2025 pricing actions, ~$16M from the Leonard Valve acquisition, and higher boiler volumes, partly offset by lower residential water heater volumes.
Within North America
Water heaters and related parts$656.4M+2% YoY
Pricing benefits offset by lower residential volumes.
Boilers, related parts, and components$101.7M+21% YoY
Carryover pricing benefits, strong seasonal pre-buy programs, and pre-buy ahead of a 2026 price increase.
Water treatment products and related parts$62.4M
Roughly flat versus prior year.
Rest of World$188.0M-19% YoY
Lower sales in China due to continued weak consumer demand, partially offset by favorable foreign currency translation of ~$6M.
Largest Expense Items
Cost of products sold$616.5M+0.4% YoY
Gross margin fell to 38.6% from 39.3% due to lower sales volumes and higher material costs.
Selling, general and administrative expenses$197.7M+$6.4M YoY
Increase primarily due to the Leonard Valve acquisition, including higher amortization expense and consulting costs.
Restructuring and impairment expenses$22.6M
North America water treatment footprint optimization and brand rationalization; includes $12.4M of asset impairments and $2.8M severance.
Interest expense$8.1M+76% YoY
Higher debt levels resulting from the Leonard Valve acquisition financing.
Margins: Gross profit margin declined to 38.6% from 39.3% YoY on lower sales volumes and higher material costs. North America segment margin fell to 21.6% from 25.4% due to the $22.6M restructuring/impairment charge and higher input costs, partly offset by pricing actions; Rest of World segment margin fell to 5.2% from 10.5% on weak China demand.
Watch Items from the Filing
China third-party sales declined 28% in local currency in Q2 2026 due to the cessation of government appliance subsidy programs; full-year China sales are projected to decrease low double-digits.
Company narrowed full-year sales growth guidance to +2-3% (from +2-4%) and diluted EPS guidance to $3.60-$3.75 (from $3.60-$3.90) citing persistent softness in North America residential water heater volumes.
Total debt rose $482.5M in H1 2026 and leverage (debt-to-total capitalization) increased to 25.7% from 7.7%, driven by the $470M debt-funded Leonard Valve acquisition.
$22.6M restructuring charge in the North America water treatment business (mostly non-cash impairment) is expected to generate $6-8M in annual savings beginning 2027.
Company announced 4-7% price increases on most water heater and boiler products, effective end of Q2 2026, in response to higher steel and input costs.
AI-extracted and verified against SEC EDGAR filing text. Not investment advice.
10 transactions in AOS reported by 5 members of Congress under the STOCK Act, most recent trade Sep 25, 2025. Reported transactions, not recommendations.
About SMITH A O CORP (AOS): stock profile, AI score and financials
SMITH A O CORP (AOS) stock profile, AI quality score, and SEC EDGAR financial data, a Technology sector company. 13F Pro's AI-powered ranking engine scores AOS at 59.8/100 on a composite quality score built from its SEC filings, placing it at rank #902 of 2,925 stocks — the top half of the AI-ranked universe. AOS scores in the top quartile across balance sheet strength (92.5), institutional flow (85.3). Areas of concern include revenue growth (20.1), which score below median versus the broader universe. Based on the latest XBRL financial filings (Q2 2026), SMITH A O CORP reports quarterly revenue of $1.0B, net income of $124.9M, an operating margin of 16.5%. Top institutional holders of AOS by reported 13-F value include FMR, BlackRock, VANGUARD CAPITAL MANAGEMENT, based on the most recent SEC filings. AOS trades on the NYSE exchange and files with the SEC under CIK 91142. 13F Pro's AI research platform runs 10 specialized AI analysts — value, growth, momentum, macro, and activist specialists — that debate AOS daily and publish AI-generated analysis with cited SEC sources. The platform aggregates historical XBRL financial facts, 10-Q and 10-K filings, insider Form 4 transactions, and institutional 13-F holdings for SMITH A O CORP directly from SEC EDGAR.