Leading industrial gas supplier
) recently announced its integration with Midrex Technologies Inc.,
a leading manufacturer of direct reduced iron (DRI) technology. The
deal was highly consistent with Praxair's strategy of enlarging its
client base and services in the industry.
Under the alliance, Praxair and Midrex will be jointly engaged
in supporting the production system of direct reduced iron (DRI)
through the latest technological system. The newly introduced
process is specifically designed with innovative partial oxidation
technology to help transforming hydrocarbon fuels into improved
quality, increased temperature syngas, which will be used for
manufacturing DRI in the regions where natural gas is unavailable.
In its first quarter 2012, Praxair fared well, reporting an EPS
of $1.38, up 1.5% year over year -- two cents above the Zacks
Consensus Estimate. Revenue gained 5% y/y on the back of the
company's impressive performance in North American and Asian
There is a huge opportunity for the company to grow in the
future due to the increased demand for the industrial gases in
several sectors. Praxair is estimating that the annual organic
sales growth will be 8%-12% by 2015.
However, the company pertains to an industry where strong
competition is prevalent. Hence, Praxair must stay cautious of big
players such as
Koppers Holdings Inc.
TOR Minerals International Inc.
The current Zacks Consensus Estimate for the second quarter of
2012 is $1.44, representing a year-over-year increase of 4.23%.
Estimates for fiscal years 2012 and 2013 are $5.83 and $6.64,
reflecting annual growth of 7.39% and 13.82%, respectively.
We maintain a Neutral recommendation on Praxair. Currently, the
stock carries a Zacks #3 Rank, implying a short-term (1-3 months)
(ACET): ETF Research Reports
KOPPERS HOLDNGS (KOP): Free Stock Analysis
PRAXAIR INC (PX): Free Stock Analysis Report
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