A.O. Smith raises FY23 adjusted EPS view to $3.30-$3.50 from $3.15-$3.45

Narrows FY23 revenue view to $3.68B-$3.83B from $3.64B-$3.87B, consensus $3.74B. "We are very pleased with our start to 2023, particularly in North America water heating, where we believe that we outperformed the market, and our price cost relationship resulted in a first quarter operating margin that was stronger than our full year expectations. We have recently seen a meaningful rise in the steel index prices which will translate into higher input costs and put pressure on water heater margins in the second half of the year. In commercial water heating, the strong start to the year was a combination of resilient demand and a comparison to a weak first quarter last year in the commercial electric product category. China’s reopening after the COVID-19 restrictions were lifted has occurred as expected so far and we are encouraged by sequential month-over-month demand improvement," stated Wheeler. "Our revised outlook for the full year 2023 projects our sales to be flat year-over-year at the mid-point, +/- 2%. We raised our expected full year adjusted EPS to be between $3.30 and $3.50, an 8% year-over-year increase at the mid-point."