Yahoo Finance A Look Back at HVAC and Water Systems Stocks' Q1 Earnings: A. O. Smith (NYSE:AOS) Vs The Rest Of The Pack
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how hvac and water systems stocks fared in Q1, starting with A. O. Smith (NYSE:AOS).
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies.
The 6 hvac and water systems stocks we track reported a slower Q1; on average, revenues missed analyst consensus estimates by 0.8%. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and hvac and water systems stocks have held roughly steady amidst all this, with share prices up 5% on average since the previous earnings results.
A. O. Smith (NYSE:AOS)
Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries.
A. O. Smith reported revenues of $978.8 million, up 1.3% year on year, falling short of analysts' expectations by 1.7%. Overall, it was a weak quarter for the company with a miss of analysts' organic revenue estimates.
The stock is flat since reporting and currently trades at $87.80.
Read our full report on A. O. Smith here, it's free.
Best Q1: Advanced Drainage (NYSE:WMS)
Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America.
Advanced Drainage reported revenues of $653.8 million, up 5.9% year on year, outperforming analysts' expectations by 6.9%. It was a stunning quarter for the company with a solid beat of analysts' earnings estimates.
Advanced Drainage achieved the biggest analyst estimates beat among its peers. Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 6% since reporting. It currently trades at $165.65.
Is now the time to buy Advanced Drainage? Access our full analysis of the earnings results here, it's free.
Weakest Q1: AAON (NASDAQ:AAON)
Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.
AAON reported revenues of $262.1 million, down 1.4% year on year, falling short of analysts' expectations by 8%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
AAON posted the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is flat since the results and currently trades at $91.24.
Read our full analysis of AAON's results here.
Lennox (NYSE:LII)
Based in Texas and founded over a century ago, Lennox (NYSE:LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration goods.
Lennox reported revenues of $1.05 billion, flat year on year, in line with analysts' expectations. Taking a step back, it was an ok quarter for the company with a decent beat of analysts' earnings estimates.
The stock is up 18.5% since reporting and currently trades at $564.06.
Read our full, actionable report on Lennox here, it's free.
Zurn Elkay (NYSE:ZWS)
Claiming to have saved more than 34 billion gallons of water due to its systems, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries.
Zurn Elkay reported revenues of $373.8 million, flat year on year, surpassing analysts' expectations by 1.3%. Taking a step back, it was a weaker quarter for the company with a miss of analysts' organic revenue estimates.
The stock is down 6.1% since reporting and currently trades at $30.72.
Read our full, actionable report on Zurn Elkay here, it's free.
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