Water heating and treatment solutions company A.O. Smith (NYSE:AOS) will be reporting results tomorrow before market open. Here’s what to look for.

A. O. Smith beat analysts’ revenue expectations by 2.5% last quarter, reporting revenues of $1.02 billion, up 6.6% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ organic revenue estimates.

Is A. O. Smith a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting A. O. Smith’s revenue to grow 2.2% year on year to $957.8 million, slowing from the 7.2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.82 per share.

Heading into earnings, analysts covering the company have grown increasingly bearish with revenue estimates seeing 9 downward revisions over the last 30 days (we track 9 analysts). A. O. Smith has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1.4% on average.

Looking at A. O. Smith’s peers in the building products segment, some have already reported their Q3 results, giving us a hint as to what we can expect. AZZ delivered year-on-year revenue growth of 2.6%, meeting analysts’ expectations, and Insteel reported a revenue decline of 14.7%, falling short of estimates by 7.5%. AZZ traded down 5.2% following the results while Insteel was also down 7.4%.

Read our full analysis of AZZ’s results here and Insteel’s results here.

There has been positive sentiment among investors in the building products segment, with share prices up 3.3% on average over the last month. A. O. Smith is down 6.2% during the same time and is heading into earnings with an average analyst price target of $85.25 (compared to the current share price of $78.78).

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