Industrial gas producer and supplier,
) reported adjusted earnings per share of $1.51 for the third
quarter of 2013, up 8.6% year over year and one cent below the
Zacks Consensus Estimate of $1.52.
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The adjusted earnings result for the quarter excludes $0.02 per
share of pension settlement related charge. Including this, GAAP
earnings per share in the quarter were $1.49.
Praxair's total sales in the third quarter increased 8.6% year
over year to $3,013 million. Results were below the Zacks
Consensus Estimate of $3,021 million. The revenue increase can be
attributed to 5% contribution from volume growth, 2% from
favorable prices and 3% contributions from acquisitions. These
were partially offset by 1% negative impact from foreign currency
Backlog at the end of the third quarter 2013 was roughly $2
In the quarter, revenues generated from North America were up
14.2% year over year while that from Europe increased 9.7%.
Revenue from South America decreased 4.3% and Asia went up 7.5%.
Surface Technologies revenue was at $160 million in the quarter,
up 1.9% from the year-ago quarter.
Cost of sales in the quarter increased 6.4% year over year and
represented 56.3% of the total revenue. Adjusted operating profit
for Praxair in the quarter was $679 million, up 9% year over year
while adjusted margin stood at 22.5%.
Exiting the third quarter 2013, Praxair had cash and cash
equivalent balance of $134 million, up 31.4% from $102 million
reported in the previous quarter. Long-term debt balance
increased 0.25% sequentially to $7,883 million.
Praxair generated net cash of $904 million from operating
activities in the third quarter, up from $746 million in the
year-ago quarter. Capital spending went down 5.7% to $516
million, with a major portion being invested for a new production
Praxair pursues a consistent strategy of returning cash to
shareholders through dividend payments and share repurchases.
During the third quarter 2013, the company paid $176 million in
dividends and repurchased shares worth $113 million.
Alongside the quarterly results, Board of Directors of Praxair
declared a quarterly dividend of 60 cents to be paid on Dec 16,
2013 to its shareholders of record as on Dec 6, 2013.
For the fourth quarter of 2013, management projects earnings per
share to be within the $1.52-$1.57 per share range.
For 2013, adjusted earnings per share are expected to be within
$5.90-$5.95 range as against $5.90-$6.00 range expected earlier
while GAAP earnings are expected to be within $5.80-$5.85 versus
prior expectation of $5.82-$5.92. The revised guidance includes
the impact of Praxair's cautious approach towards volume growth
in the fourth quarter.
Sales are expected to be roughly $12 billion for the full year.
Capital spending is expected to be $1.9 billion and adjusted
effective tax rate guidance is projected to be 28%.
Praxair Inc. is the largest industrial gas producer and supplier
in the Americas and one of the leading gas producing companies
worldwide. The stock currently carries a Zacks Rank #2 (Buy).
Other stocks to watch out for in the industry are
E. I. du Pont de Nemours and Company
PPG Industries Inc.
Air Products & Chemicals Inc.
), each carrying a Zacks Rank #2 (Buy).