Industrial gas producer and supplier, Praxair Inc. ( PX ) reported earnings per share of $1.49 for the second quarter of 2013, up 5% year over year and one cent above the Zacks Consensus Estimate of $1.48.
Earnings for the second quarter 2013 came in toward the high-end of the management's predicted range of $1.45-$1.50 per share.
Revenues
Praxair reported total revenue of $3,014 million in the second quarter, up 7.2% year over year and above the Zacks Consensus Estimate of $2,999 million.
The company realized volume gains from Asia and South America, offset partially by declines in Europe. Volumes in North America were flat year-over-year. Roughly 3% growth in the quarter was attributable to acquisitions.
In the quarter, revenues generated from North America were up 11% year over year, while that from Europe were flat. Revenues from South America grew 3% and Asia went up 9%. Surface Technologies revenues were at $165 million in the quarter, down 2% from the year-ago quarter.
Margins
Cost of sales in the quarter increased 6.7% year over year and represented 56.7% of the total revenue. Adjusted operating profit for Praxair in the quarter was $665 million, up 5% year over year while adjusted margin stood at 22.1%.
Balance Sheet
Exiting the second quarter of 2013, Praxair had cash and cash equivalent balance of $102 million versus $113 million in the previous quarter. Long-term debt balance increased 1.2% sequentially to $7,863 million.
Cash Flow
Praxair generated net cash of $577 million from operating activities in the second quarter, down from $725 million in the year-ago quarter. Capital spending went down 7.4% to $522 million, with a major portion being invested for a new production plant setting.
Share Repurchases/Dividends
Praxair pursues a consistent strategy of returning cash to shareholders through dividend payments and share repurchases. During the second quarter 2013, the company paid $177 million in dividends and repurchased shares worth $152 million.
Alongside the quarterly results, Board of Directors of Praxair declared a quarterly dividend of 60 cents to be paid on Sep 16, 2013 to its shareholders of record as on Sep 6, 2013.
Outlook
For the third quarter of 2013, management projects earnings per share to be within the range of $1.48-$1.53. For 2013, adjusted earnings per share are expected to be within $5.90-$6.00 as against earlier expectation of $5.90-$6.05. GAAP earnings are expected to be within $5.82-$5.92 versus $5.82-$5.97 anticipated earlier. The guidance revision includes the impact of negative currency translation as well as expected $9 million of pension settlement charges in the third quarter of 2013.
Sales are expected to be roughly $12 billion for the full year. Capital spending is expected to be in the range of $1.8-$2.0 billion and 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. The stock currently carries a Zacks Rank #4 (Sell).
Other stocks to watch out for in the industry are Northern Technologies International Corp. ( NTIC ), with a Zacks Rank #1 (Strong Buy), while PPG Industries Inc. ( PPG ) and Cabot Corporation ( CBT ) both carry a Zacks Rank #2 (Buy).
CABOT CORP (CBT): Free Stock Analysis Report
NORTHERN TECH (NTIC): Free Stock Analysis Report
PPG INDS INC (PPG): Free Stock Analysis Report
PRAXAIR INC (PX): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
