A. O. Smith Corp. announced record 2007 net earnings of US$88.2 million or $2.85 per share on record sales of $2.3 billion. Net earnings increased 15% compared with $76.5 million or $2.47 per share in 2006. Sales increased 7% over the prior year due to higher sales in China, increased sales of commercial water heaters, and a full year of the GSW business acquired in April 2006, which added $128 million in sales in the first quarter of 2007.
In the fourth quarter of 2007, the company reported net earnings of $17.0 million or $.55 per share compared with earnings of $18.9 million or $.61 per share in the fourth quarter of 2006. Earnings included after-tax restructuring and other charges of $8.2 million or $.26 per share in the fourth quarter of 2007 compared with $2.8 million or $0.09 per share in the fourth quarter of 2006.
Fourth quarter sales of $570 million increased 5% over the prior year. An 11% increase at Water Products from higher sales in China and strong commercial water heater sales more than offset a 5% decline at Electrical Products.
Water Products achieved record 2007 sales of $1.42 billion, 13% higher than 2006 sales of $1.26 billion. The company benefited from a full year of sales from GSW, acquired in April of 2006, increased sales of commercial water heaters, and a 26 percent increase in sales in China to approximately $150 million.
In spite of selling price improvements to offset higher costs for raw materials and growth in the global market, sales by Electrical Products declined modestly in 2007 to $894.0 million. Unit volume sales were negatively impacted by the weak housing market, most notably in the residential hermetic and pump motor segments which more than offset improved sales in the commercial hermetic and distribution market segments.
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