Water technology company A. O. Smith Corp. today reported third quarter net income of $37.0 million, or 79 cents per share, down from $182.3 million, or $3.91 per share, in the same period a year ago.
The Milwaukee-based company’s quarterly net sales grew to $462.2 million from $412.0 million a year earlier.
The company’s 2012 third quarter performance included a full quarter of Lochinvar’s results, which was acquired in late August last year.
Prior-year third quarter earnings from continuing operations of $26.9 million or $.58 per share included a net pre-tax gain of $16.4 million related to shares of Regal Beloit Corp. and an equity collar, as well as pre-tax professional fees and expenses totaling $4.4 million related to the purchase of Lochinvar. The net favorable impact to earnings from these items in last year’s third quarter was $.19 per share. In the 2011 quarter. A.O. Smith completed the sale of its Electrical Products Co. business to Regal Beloit for $875 million.
The company’s earnings from continuing operations rose 38 percent to $37 million, or 79 cents per share, from $26.9 million or 58 cents.
The rise in A.O. Smith’s quarterly sales was driven by incremental Lochinvar sales and strong organic growth in China.
“The factors that have been influencing our business throughout 2012 continued during the third quarter,” said Paul Jones, chairman and chief executive officer of A.O. Smith. “Our A. O. Smith branded sales in China grew over 20 percent in the quarter driven by new distribution, market share gains and new products, despite the slowdown in that country’s economy.”
Looking ahead, Jones said, “A. O. Smith continues to make progress as it pursues its strategy to become a global water technology company. The integration of the Lochinvar acquisition is essentially complete, and our pipeline of possible acquisition candidates remains active. We continue to pursue water heater and water treatment investments all over the world, and we are committed to investments that increase shareholder value. With more than $400 million in cash and an additional $400 million in borrowing capacity, we believe we have more than enough resources to take advantage of the right opportunities when they come along.”
The company raised its earnings guidance for the full year to between $2.85 and $2.95 per share.
