Air Products Profit Rises 4.3% on Lower Operating Margin

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Air Products Profit Rises 4.3% on Improved Operating Margin


By Everdeen Mason

Air Products & Chemicals Inc. ( APD ) said its fiscal first-quarter earnings climbed 4.3% as the industrial-gas provider's improved operating margins offset a slight decline in revenue.

The company, whose products include oxygen, helium and welding and cutting gases, backed its full-year earnings outlook of $5.70 to $5.90 a share. Second-quarter earnings are expected to be $1.32 to $1.37 a share, compared with $ 1.44 a share expected by analysts polled by Thomson Reuters.

Chief Executive John McGlade said Air Products' cost reduction efforts and signings helped boost profits, and said the company was bringing on new plants in China. Mr. McGlade said in September he planned to retire this year and the company will add three new independent directors.

For the quarter ended Dec. 31, Air Products reported earnings of $290.2 million, or $1.35 a share, up from $278.3 million, or $1.33 a share, a year earlier. Discontinued operations remained flat at a profit of a penny a share.

The company had predicted per-share adjusted earnings between $1.30 and $1.35.

Sales slid to $2.55 billion from $2.56 billion a year ago as slightly lower volumes and stable pricing offset higher energy pass-through. Analysts recently expected $2.57 billion in revenue.

The operating margin widened to 15.1% from 14.5% as input costs fell 1.8%.

Sales in the company's merchant gases segment rose 3.8% to $1.05 billion. Air Products' tonnage gases segment, which provides gases to refineries and steelmaking industries, reported a 10% drop in revenue. Sales in electronics and performance materials increased 5.5%.

Shares closed Monday at $106.24 and were inactive premarket. The stock is up 21% over the past 12 months.

Write to Everdeen Mason at everdeen.mason@wsj.com

Corrections & Amplifications

This item was corrected at 8:19 a.m. ET because the original misstated the change in operating margin in the headline. The metric increased.

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