Industrial gas giant
Air Products and Chemicals Inc.
) logged second-quarter fiscal 2013 (ended Mar 31, 2013) earnings
from continued operations of $1.37 a share, at par with the Zacks
Consensus Estimate and higher than the year ago earnings of $1.30
(or $1.31 per share as adjusted).
Net income from continuing operation increased 3.7% year over
year to $289.3 million. Efficient cost management and execution
of plans led to the increased earnings.
Revenues rose 6% year over year to $2,484.2 million, missing
the Zacks Consensus Estimate of $2,585 million. Sales were aided
by acquisitions. Underlying sales declined 2% due to Air
Products' previously announced decision to exit the Polyurethane
Revenues from the core Merchant Gases segment sales climbed
14% year over year to $1,003 million in the second quarter on the
back of Indura acquisition. Sales from the Tonnage Gases division
rose 3% to $809 million driven by strong new plant volumes and
higher energy pass through.
Revenues from the Electronics and Performance Materials
segment fell 3% year over year to $549 million, affected by lower
electronics materials and equipment sales, partially offset by
the DA NanoMaterials acquisition.
The Equipment and Energy division saw healthy gains in the
quarter with sales surging 12% to $124 million, boosted by higher
liquefied natural gas (LNG) project activity.
Air Products' cash and cash equivalents stood at $401.6
million as of Mar 31, 2013, compared with $319.5 million as of
Mar 31, 2012. Long-term debt stood at $4,644.7 million as of Mar
31, 2013, compared with $3,879.8 million as of Mar 31, 2012.
Air Products trimmed its 2013 expectations due to the challenging
economic conditions it faced in the second quarter. The company
now anticipates earnings for fiscal 2013 to be in the range of
$5.45 to $5.60 per share, down from its previous guidance of
$5.70 to $5.90 per share. For third-quarter fiscal 2013, earnings
are expected in the band of $1.33 to $1.38 per share.
Air Products remains focused on having reliable plant
operations, disciplined project execution, capital allocation,
and further productivity improvements. The company expects that
its recent strategic moves will position it for future growth and
profitability despite the modest economic backdrop.
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, sluggish economic conditions across the U.S. and
Europe may continue to impact the demand for the company's
Air Products currently holds a short-term Zacks Rank #3
Other companies in the chemical industry having favorable
Zacks Rank are
LyondellBasell Industries NV
Eastman Chemical Co.
). All of them retain a Zacks Rank #2 (Buy).
AIR PRODS & CHE (APD): Free Stock Analysis
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