Shares of A.O. Smith (AOS) soared more than 10% Tuesday morning after the maker of water heating equipment swung to a strong second-quarter profit over a year ago loss as sales continued to expand in China.

The company also said Tuesday it will buy privately-held maker of high-efficiency boilers Lochinvar for $418 million plus debt in an effort to expand its core products with new technologies into emerging global markets.

That deal is slated to close in the third quarter, subject to customary closing conditions and regulatory approvals. A.O. Smith expects the deal to be accretive to earnings starting in the fourth quarter of this year.

Smith, based in Milwaukee, booked net earnings of $28.6 million, or 62 cents a share, compared with a loss of $900,000, or 2 cents a share, in the same quarter last year, beating the Streets view of 50 cents.

The quarterly results included a settlement with a supplier and proceeds from its sales of the Electrical Products Company, which more than offset a $1.6 million loss in the first quarter.

Revenue for the three months ended June 30 was $405.3 million, up from $375 million a year ago, ahead of average analyst estimates polled by Thomson Reuters of $396.9 million.

Looking ahead, the company said it anticipates continued sales growth in China, however it warned sales of higher-efficiency products in North America will not be as strong without tax incentives.

The company narrowed its fiscal view to a range of $1.95 to $2.05 a share. Analysts are looking for slightly stronger earnings of $2.10 a share.

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