A. O. Smith Corp. (AOS, Financial) filed Quarterly Report for the period ended 2009-03-31.
A. O. Smith Corporation with headquarters in Milwaukee Wis. is a diversified manufacturer serving customers worldwide. The company is one of the world's leading manufacturers and marketers of residential and commercial water heating equipment offering a comprehensive line featuring the best- known brands in the industry. It is also one of North America's largest manufacturers of electric motors with an extensive line of hermetic fractional horsepower and integral horsepower motors for residential commercial and industrial applications. A. O. Smith employs people at facilities in the United States Mexico China Canada and Europe. A. O. Smith Corp. has a market cap of $962.2 million; its shares were traded at around $31.87 with a P/E ratio of 13.8 and P/S ratio of 0.4. The dividend yield of A. O. Smith Corp. stocks is 2.4%. A. O. Smith Corp. had an annual average earning growth of 2.5% over the past 10 years.
Net earnings in the first quarter of 2009 were $8.7 million or $0.29 per diluted share and compared to net earnings of $21.9 million or $0.72 per diluted share in the first quarter of 2008.
Our Electrical Products segment recognized an operating loss of $3.1 million in the first quarter of 2009 compared to operating earnings of $11.1 million in the first quarter of 2008. As previously mentioned, the first quarters of 2009 and 2008 reflected restructuring charges of $0.5 million and $3.8 million, respectively. The lower earnings in 2009 resulted from significantly lower volumes which more than offset $5.0 million in cost savings achieved from 2008 restructuring activities.
As a result of weak demand and the prolonged and severe housing slump, we are reducing our annual earnings guidance to between $1.80 and $2.10 per share. We are forecasting that we will still generate $140 to $150 million in operating cash flow this year, despite our lower earnings outlook and higher pension plan payments.
Our working capital was $330.5 million at March 31, 2009, $54.2 million greater than at December 31, 2008, due to lower accounts payable balances at both businesses which were partially offset by lower inventory levels and a $18.2 million decline in cash deposits associated with derivative contracts. In addition, a $30.7 million (non-cash) decline in our derivative contracts liability added to the increase in working capital. Cash provided by operating activities during the first quarter of 2009 was $6.0 million compared with $14.9 million cash used by operating activities during the first quarter of 2008. A smaller investment in working capital during the first quarter of 2009 compared with the same period in 2008 was partially offset by lower earnings in the first quarter of this year compared with the first quarter 2008. For the total year 2009, we expect cash provided by operating activities to be approximately $140 to $150 million.
Our capital expenditures totaled $12.5 million during the first quarter of 2009, compared with $9.8 million one year ago. We are projecting 2009 capital expenditures to be between $60 and $70 million, similar to the levels of last year and approximately the same as projected depreciation and amortization expense. Capital spending in 2009 includes the construction of the water heater manufacturing plant near Bangalore, India and the completion of the expansion of our Nanjing, China water heater operations.
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A. O. Smith Corporation with headquarters in Milwaukee Wis. is a diversified manufacturer serving customers worldwide. The company is one of the world's leading manufacturers and marketers of residential and commercial water heating equipment offering a comprehensive line featuring the best- known brands in the industry. It is also one of North America's largest manufacturers of electric motors with an extensive line of hermetic fractional horsepower and integral horsepower motors for residential commercial and industrial applications. A. O. Smith employs people at facilities in the United States Mexico China Canada and Europe. A. O. Smith Corp. has a market cap of $962.2 million; its shares were traded at around $31.87 with a P/E ratio of 13.8 and P/S ratio of 0.4. The dividend yield of A. O. Smith Corp. stocks is 2.4%. A. O. Smith Corp. had an annual average earning growth of 2.5% over the past 10 years.
Highlight of Business Operations:
Restructuring and other charges were $1.4 million and $3.8 million in the first quarter of 2009 and 2008, respectively. The 2009 amount is comprised of a $0.9 million loss on sale of a vacated facility from a previously owned business recognized in corporate expense, and $0.5 million of equipment move costs associated with certain Electrical Products plant closures. The $3.8 million recognized in 2008 was related entirely to plant closure activities at Electrical Products.Net earnings in the first quarter of 2009 were $8.7 million or $0.29 per diluted share and compared to net earnings of $21.9 million or $0.72 per diluted share in the first quarter of 2008.
Our Electrical Products segment recognized an operating loss of $3.1 million in the first quarter of 2009 compared to operating earnings of $11.1 million in the first quarter of 2008. As previously mentioned, the first quarters of 2009 and 2008 reflected restructuring charges of $0.5 million and $3.8 million, respectively. The lower earnings in 2009 resulted from significantly lower volumes which more than offset $5.0 million in cost savings achieved from 2008 restructuring activities.
As a result of weak demand and the prolonged and severe housing slump, we are reducing our annual earnings guidance to between $1.80 and $2.10 per share. We are forecasting that we will still generate $140 to $150 million in operating cash flow this year, despite our lower earnings outlook and higher pension plan payments.
Our working capital was $330.5 million at March 31, 2009, $54.2 million greater than at December 31, 2008, due to lower accounts payable balances at both businesses which were partially offset by lower inventory levels and a $18.2 million decline in cash deposits associated with derivative contracts. In addition, a $30.7 million (non-cash) decline in our derivative contracts liability added to the increase in working capital. Cash provided by operating activities during the first quarter of 2009 was $6.0 million compared with $14.9 million cash used by operating activities during the first quarter of 2008. A smaller investment in working capital during the first quarter of 2009 compared with the same period in 2008 was partially offset by lower earnings in the first quarter of this year compared with the first quarter 2008. For the total year 2009, we expect cash provided by operating activities to be approximately $140 to $150 million.
Our capital expenditures totaled $12.5 million during the first quarter of 2009, compared with $9.8 million one year ago. We are projecting 2009 capital expenditures to be between $60 and $70 million, similar to the levels of last year and approximately the same as projected depreciation and amortization expense. Capital spending in 2009 includes the construction of the water heater manufacturing plant near Bangalore, India and the completion of the expansion of our Nanjing, China water heater operations.
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