Industrial gas giant
Air Products and Chemicals Inc.
) logged first-quarter fiscal 2013 (ended December 31, 2012)
earnings from continued operations of $1.30 a share, beating the
Zacks Consensus Estimate by a penny. Consolidated net income from
continuing operation increased 22.6% year over year to $276.9
Revenues rose 10.4% year over year to $2,562.4 million, beating
the Zacks Consensus Estimate of $2,471 million. Sales were aided
by higher volumes in the Tonnage Gases, Equipment and Energy
divisions and acquisitions.
Revenues from the core Merchant Gases segment sales climbed
14% year over year to $1,009 million in the first quarter on the
back of Indura acquisition. Sales from the Tonnage Gases division
rose 11% to $898 million driven by strong new plant volumes.
Revenues from the Electronics and Performance Materials segment
rose 3% year over year at $549 million, supported by the
acquisition of DA NanoMaterials. The Equipment and Energy
division saw healthy gains in the quarter with sales surging 19%
to $106 million, boosted by an increase in large air separation
unit and liquefied natural gas (LNG) equipment revenues.
Air Products exited the first quarter with cash and cash
equivalents of $545.6 million, up roughly 20.1% sequentially.
Long-term debt stood at $5,107.3 million as of December 31, 2012,
compared with $4584.2 million as of September 30, 2012.
For fiscal 2013, Air Products plans to take a number of steps
including cost control measures, restructuring actions, price
improvements and volume growth. The company expects that its
recent strategic moves will position it for future growth and
profitability despite the modest economic backdrop.
The company now anticipates earnings for fiscal 2013 to be in
the range of $5.70 to $5.90 per share, up from its previous
guidance of $5.65 and $5.85 per share. For second-quarter fiscal
2013, earnings are expected in the band of $1.34 to $1.39 per
Air Products' healthy project backlog strongly positions it to
achieve its long-term growth target. Given its leading position
in the gases business, the company is well positioned to
capitalize on the cyclical recovery in its core industrial end
New business wins in the Merchant Gases segment should drive
results in the near term. The acquisition of a 67% stake in
Chilean industrial gas company, Indura, is expected to usher in
substantial growth opportunity for Air Product, placing it as
Latin America's second largest industrial gas producer. However,
Air Products remains exposed to raw material inflation.
Air Products currently holds a short-term Zacks Rank #2
Other companies in the chemical industry having favorable
Zacks Rank are
) with a Zacks Rank #1 (Strong Buy),
) with a Zacks Rank #1 (Strong Buy) and
L'Air Liquide SA
) with a Zacks Rank #2 (Buy).
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AIR PRODS & CHE (APD): Free Stock Analysis
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BASF SE (BASFY): Free Stock Analysis Report
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