BUSINESS

A.O. Smith reports record 2016 results

John Schmid
Milwaukee Journal Sentinel
A.O. Smith Corp. CEO Ajita Rajendra said Thursday that 2016 was a record year for the Milwaukee-based water technology group.

A.O. Smith Corp., a Milwaukee-based water technology group, on Thursday reported record 2016 earnings and forecast continued earnings growth in the current year.

China has been a perennial driver for the company's growth as well as its manufacturing base, and 2016 saw a 35% increase in sales of Chinese systems that treat water, the company said.

“It was another record year for A. O. Smith in 2016 driven by solid, global performance. We believe our sales in China will continue to grow at a rate of approximately 15%," said A.O. Smith CEO Ajita Rajendra. The U.S. market also remained buoyant last year. "We believe our sales in the U.S. will be driven by residential water heater growth, as well as continued growth of boilers and water treatment products,” Rajendra said.

RELATED: Marquette, A.O. Smith collaborate on water technology study

RELATED: Jagler: Self-disruption propels A.O. Smith

In the year ended Dec. 31, net earnings rose 15% to a record  $326.5 million, or $1.85 per share, from $282.9 million, or $1.58 per share in 2015. For 2017, the company forecast per-share earnings in a range of $1.98-$2.08, with a midpoint that amounts to a 10% increase over 2016. The forecast does not include the potential impact of future acquisitions.

Sales last year rose 5.9% to a record  $2.69 billion from $2.54 billion in 2015, but the increase amounted to 8% when adjusted for the stronger value of the dollar against the Chinese currency.

In the final three months of 2016, net earnings rose to $82.7 million or 47 cents per share from $79.8 million or 45 cents in the fourth quarter of 2015. Sales in the quarter rose to $698.1 million from $639.4 million a year earlier.

The company in August acquired Texas-based Aquasana Inc. and continued to expand its range of residential water treatment technology.