A. O. Smith Reduces Forecast for 2005

MILWAUKEE, June 24 -- A. O. Smith Corporation today lowered its forecast for 2005 to a range of between $1.25 and $1.45 per share, from the previously communicated forecast of $1.45 to $1.65 per share. The company expects earnings for the second quarter to range between $.15 and $.20 a share. As previously announced the company will record an estimated $.35 annual charge for restructuring which includes approximately $.30 in the second quarter. Excluding the restructuring charge, the company expects to earn between $1.60 and $1.80 per share for the year and $.45 to $.50 per share for the quarter.

After reviewing water heater industry shipment data for April and May, which declined fourteen percent in residential and twenty five percent in commercial compared with 2004, the company is reducing its projection for industry shipments for the year. The company believes this lower commercial and residential market projection is primarily caused by higher than expected wholesale inventories. As a result the company has reduced its projection for full year sales and earnings at its Water Systems business.

Expectations for the Electrical Products business are essentially unchanged from the company's outlook at the time of its earnings forecast in April.

A. O. Smith Corporation, with headquarters in Milwaukee, Wis., is one of North America's largest manufacturers of electric motors, with a comprehensive line of hermetic motors, fractional horsepower alternating current (AC) and direct current (DC) motors, and integral horsepower motors, as well as one of North America's largest manufacturers of residential and commercial water heating equipment. The company employs approximately 16,500 people worldwide.