UPDATE: Praxair 3Q Down 8.5% Amid Mixed End Markets
(Updates throughout with detail from conference call, share price)
DOW JONES NEWSWIRES
Praxair Inc. (PX), the industrial gas producer, said Wednesday that most of
its end markets improved in the third quarter, with the notable exception of
manufacturing clients.
The U.S. group also raised the top end of its full-year earnings' guidance as
it reported an 8.5% drop in third-quarter profit.
While Chairman and Chief Executive Steve Angel noted in a statement that
business conditions had stabilized globally, the sequential decline in
manufacturing business--notably in North America--adds to the mixed signals from
the sector during the third-quarter season.
Praxair, like other chemical companies, has sliced capacity and jobs to
counter weak demand and firm pricing, though its operating margin slid to 22.6%
in the quarter from 23.6% in the prior three months.
Energy and metals are by far the most resilient sectors, said Praxair, with
double-digit percentage gains in sales during the third quarter compared with
the second quarter.
It saw pockets of sequential improvement in Asia and South America in the
previous period, while European and North American volumes showed signs of
stabilization.
Praxair earnings fell to $325 million, or $1.04 a share, from $355 million, or
$1.11 a share, a year earlier. The latest results included a $7 million tax
benefit worth 2 cents a share.
In July, the company projected between 95 cents and $1 a share, below
analysts' estimates at the time.
Revenue slid 20% to $2.29 billion. A survey of analysts by Thomson Reuters
anticipated revenue of $2.3 billion.
Underlying North American sales dropped 12% on lower volumes. However, both
sales and operating profit rose from the previous quarter.
Excluding foreign-exchanges effects, sales fell 8% in Europe and 6% in South
America, but Asia posted 3% sales growth from the year earlier and 15% growth
from the prior quarter.
The company projects current-quarter earnings of $1.05 to $1.10, in line with
analysts' expectations for $1.07.
Praxair now sees $3.96 to $4.01 a share for 2009, excluding items, compared
with its September view was $3.99.
Shares in Praxair, which affirmed its full-year revenue view, dipped 2.5% to $
79.47 in recent trading. The stock has risen 37% so far this year.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@
dowjones.com
(Doug Cameron contributed to this article.)
(END) Dow Jones Newswires
10-28-091103ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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