A. O. Smith’s Pricing Playbook: How Tariffs, Steel Costs, and Mix Are Shaping North America Margins!

A. O. Smith Corporation reported full-year 2025 results that reflected stable top-line performance alongside incremental margin expansion, supported by pricing actions, cost discipline, and portfolio adjustments, while facing continued end-market and geographic challenges. Sales increased modestly to $3.8 billion as higher pricing and stronger commercial water heater and boiler volumes in North America were offset by weaker demand in China. Earnings per share rose to a record $3.85, driven primarily by profitability improvements across both operating segments rather than volume growth. Free cash flow increased 15% year over year to $546 million, aided by lower capital expenditures, higher earnings, and a one-time tax benefit, enabling continued shareholder returns through dividends and share repurchases. In North America, performance was mixed. Commercial water heaters and boilers showed solid momentum, with boiler sales rising 8% on higher volumes and pricing, reflecting demand for high-efficiency products and favorable commercial trends.