A. O. Smith Corp. (AOS, Financial) filed Quarterly Report for the period ended 2010-09-30.
A. O. Smith Corp. has a market cap of $1.76 billion; its shares were traded at around $57.22 with a P/E ratio of 14.4 and P/S ratio of 0.9. The dividend yield of A. O. Smith Corp. stocks is 1.5%. A. O. Smith Corp. had an annual average earning growth of 5.7% over the past 10 years.AOS is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Paul Tudor Jones of The Tudor Group, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Mario Gabelli of GAMCO Investors.
In the third quarter of 2010, we recognized $0.4 million of restructuring income from unutilized reserves associated with prior plant closings. In the third quarter of 2009, we had restructuring income of $3.0 million associated with the sale of our Shenzhen, China electric motor facility to the Chinese government, which exercised eminent domain relative to a road construction project. In the first nine months of 2009, restructuring income was $1.5 million as the gain on the Shenzhen facility was partially offset by a $1.0 million loss on sale of a vacated facility from a previously owned business and $0.5 million of moving costs associated with certain Electrical Products plant closures. In the first nine months of 2010, we incurred net restructuring expenses of $0.1 million consisting of $0.7 million of severance cost associated with the Shenzhen closure as partially offset by $0.6 million of income from unutilized reserves associated with prior plant closings.
Our effective tax rates for the third quarter and first nine months of 2010 were 27.8 percent and 24.3 percent, respectively, and included a benefit of $0.8 million related to the adjustment of the book tax provision to taxes paid. The rate for the first nine months of 2010 also included a second quarter $13.3 million tax benefit on the $34.2 million charge for flood related expenses. The 2009 third quarter effective tax rate was 24.7 percent and included a $3.0 million non-taxable gain associated with the sale of a motor manufacturing plant in Shenzhen, China and a $1.5 million tax benefit for additional research tax credits and closure of a federal tax audit. The effective tax rate for the first nine months of 2009 was 23.1 percent and included the aforementioned third quarter benefits and a $1.9 million second quarter favorable adjustment in deferred taxes, primarily related to a retroactive reduction in the tax rate of the China water heater operation for achieving high technology status.
Third quarter sales for our Water Products segment were $377.5 million or $40.8 million higher than 2009 third quarter sales of $336.7 million. Year-to-date sales in 2010 were $1.12 billion or $106.3 million higher than the same period in 2009. The sales increase in both the third quarter and first nine months of the year was due mostly to significantly higher sales in our water heater operation in China resulting from geographic expansion, market share gains and new product introductions. In addition, our recently acquired water treatment business contributed sales of $8.3 million and $24.3 million in the third quarter and first nine months of 2010, respectively.
Operating earnings for our Electrical Products segment in the third quarter of 2010 were $21.7 million or $1.1 million lower than 2009 third quarter earnings of $22.8 million as earnings from higher volumes and pricing actions were partially offset by higher steel costs. Also, last years third quarter earnings benefited from a $3.0 million net gain associated with the sale of the Shenzhen, China facility and $2.2 million of LIFO income which resulted from reduced inventory levels. Operating earnings for the first nine months of 2010 were $61.9 million or $34.5 million higher than the same period last year. The improved year-to-date earnings in 2010 were due to higher volumes, lower operating costs, ongoing process improvement activities and increased sales of new products.
Our capital expenditures totaled $47.6 million during the first nine months of 2010, compared with $37.9 million spent one year ago. We are projecting 2010 capital expenditures to be between $80 and $90 million with approximately $20 million spent in this year as a result of the Tennessee flooding. Full year depreciation and amortization is expected to be approximately $70 million.
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A. O. Smith Corp. has a market cap of $1.76 billion; its shares were traded at around $57.22 with a P/E ratio of 14.4 and P/S ratio of 0.9. The dividend yield of A. O. Smith Corp. stocks is 1.5%. A. O. Smith Corp. had an annual average earning growth of 5.7% over the past 10 years.AOS is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Paul Tudor Jones of The Tudor Group, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Mario Gabelli of GAMCO Investors.
Highlight of Business Operations:
Net earnings for the third quarter of 2010 were $32.0 million or $1.04 per diluted share or $2.6 million lower than net earnings of $34.6 million or $1.14 per diluted share in the third quarter of 2009. The lower third quarter earnings in 2010 were due to higher material costs, a $3.0 million gain on the sale of our Shenzhen, China motor facility in 2009 and a $1.5 million tax benefit in 2009 for additional research tax credits and closure of a federal tax audit. Net earnings for the first nine months of 2010 were $79.5 million or $2.59 per diluted share and compared to reported net earnings of $58.6 million or $2.69 per diluted share in the same period of 2009. Our reported earnings per share under GAAP for the first nine months of 2009 have been impacted by required accounting related to the companys transaction with Smith Investment Company (SICO), which closed on April 22, 2009 and is discussed in more detail in Note 1 of the Notes to Condensed Consolidated Financial Statements. For accounting purposes, the former controlling shareholder, SICO, is treated as the acquirer even though A. O. Smith Corporation (the company) is the surviving corporation from a legal standpoint. Earnings and earnings per share amounts reported by the company for the first nine months of 2009 include SICO earnings and shares outstanding as adjusted by the exchange ratio of the merger.In the third quarter of 2010, we recognized $0.4 million of restructuring income from unutilized reserves associated with prior plant closings. In the third quarter of 2009, we had restructuring income of $3.0 million associated with the sale of our Shenzhen, China electric motor facility to the Chinese government, which exercised eminent domain relative to a road construction project. In the first nine months of 2009, restructuring income was $1.5 million as the gain on the Shenzhen facility was partially offset by a $1.0 million loss on sale of a vacated facility from a previously owned business and $0.5 million of moving costs associated with certain Electrical Products plant closures. In the first nine months of 2010, we incurred net restructuring expenses of $0.1 million consisting of $0.7 million of severance cost associated with the Shenzhen closure as partially offset by $0.6 million of income from unutilized reserves associated with prior plant closings.
Our effective tax rates for the third quarter and first nine months of 2010 were 27.8 percent and 24.3 percent, respectively, and included a benefit of $0.8 million related to the adjustment of the book tax provision to taxes paid. The rate for the first nine months of 2010 also included a second quarter $13.3 million tax benefit on the $34.2 million charge for flood related expenses. The 2009 third quarter effective tax rate was 24.7 percent and included a $3.0 million non-taxable gain associated with the sale of a motor manufacturing plant in Shenzhen, China and a $1.5 million tax benefit for additional research tax credits and closure of a federal tax audit. The effective tax rate for the first nine months of 2009 was 23.1 percent and included the aforementioned third quarter benefits and a $1.9 million second quarter favorable adjustment in deferred taxes, primarily related to a retroactive reduction in the tax rate of the China water heater operation for achieving high technology status.
Third quarter sales for our Water Products segment were $377.5 million or $40.8 million higher than 2009 third quarter sales of $336.7 million. Year-to-date sales in 2010 were $1.12 billion or $106.3 million higher than the same period in 2009. The sales increase in both the third quarter and first nine months of the year was due mostly to significantly higher sales in our water heater operation in China resulting from geographic expansion, market share gains and new product introductions. In addition, our recently acquired water treatment business contributed sales of $8.3 million and $24.3 million in the third quarter and first nine months of 2010, respectively.
Operating earnings for our Electrical Products segment in the third quarter of 2010 were $21.7 million or $1.1 million lower than 2009 third quarter earnings of $22.8 million as earnings from higher volumes and pricing actions were partially offset by higher steel costs. Also, last years third quarter earnings benefited from a $3.0 million net gain associated with the sale of the Shenzhen, China facility and $2.2 million of LIFO income which resulted from reduced inventory levels. Operating earnings for the first nine months of 2010 were $61.9 million or $34.5 million higher than the same period last year. The improved year-to-date earnings in 2010 were due to higher volumes, lower operating costs, ongoing process improvement activities and increased sales of new products.
Our capital expenditures totaled $47.6 million during the first nine months of 2010, compared with $37.9 million spent one year ago. We are projecting 2010 capital expenditures to be between $80 and $90 million with approximately $20 million spent in this year as a result of the Tennessee flooding. Full year depreciation and amortization is expected to be approximately $70 million.
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