By Connor Hart

Water-technology company A.O. Smith lowered its outlook for the year, as the company continues to face challenges in its China business and new home construction stalls in North America.

The Milwaukee company posted a third-quarter profit of $132 million, up from $120.1 million a year earlier. Quarterly earnings of 94 cents a share topped the 91 cents a share that analysts polled by FactSet expected.

Revenue rose 4.4% to $942.5 million. Wall Street modeled $948 million.

Sales were up about 6% in North America, driven by higher prices and continued demand for commercial water heaters and boilers. International sales slipped 1%, hurt in part by continued economic challenges in China.

Chief Executive Steve Shafer said he was pleased with the top- and bottom-line performance in North America, and that the company's ongoing strategic assessment of its China business will help to clarify a path forward for that business.

"We are cautious about the remainder of the year," he added, "primarily due to continued headwinds in the China market and the impact of weakening new home construction on residential water heating in North America."

For the year, A.O. Smith now expects earnings of $3.70 to $3.85 a share on revenue of $3.8 billion to $3.85 billion. The company had previously guided for earnings of $3.70 to $3.90 a share on revenue of $3.85 billion to $3.93 billion.

Shares fell 1.6% to $67.50 in premarket trading.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

October 28, 2025 08:44 ET (12:44 GMT)

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