Air Products & Chemicals Revenue Falls on Lower Energy Pass-Through
28 July 2016 - 9:48PM
Dow Jones News
By Austen Hufford
Air Products & Chemicals Inc. posted a revenue decline on
lower energy pass-through but increased its profit as expenses fell
more.
Chief Executive Seifi Ghasemi said the company performed well
"despite sluggish economic growth worldwide and continued currency
headwinds."
Revenue decreased as 4% higher volumes were more than offset by
3% lower energy pass-through and 2% unfavorable currency rates. The
volume increases were driven by the industrial gases segments in
its global segment and in Asia and North America segments. Pricing
was flat.
Still, Air Products raised the bottom end of its yearly profit
forecast, now expecting $7.45 to $7.55 in adjusted earnings per
share, adding 5 cents to the bottom of the range it expected
previously. For the current quarter, Air Products expects adjusted
per-share earnings of between $1.91 and $2.01. Analysts polled by
Thomson Reuters had expected earnings per share of $1.97.
Air Products said in May that it would sell its
performance-materials division for $3.8 billion to Evonik
Industries AG. Last year, the company said it aimed to split into
two publicly traded companies: materials technologies, which houses
the performance business, and industrial gases. Air Products said
it still intends to spin off the rest of its materials technologies
division, which includes electronic materials, sometime this
year.
For the quarter, the company posted a profit of $346.8 million,
or $1.59 a share, from a profit of $318.8 million, or $1.47 a year
prior. Excluding special charges, adjusted per-share earnings from
continuing operations was $1.92.
Revenue declined 1.4% to $2.43 billion.
Expenses fell more, with cost of sales falling 4.4% and selling
and administrative expenses decreasing 12%.
Analysts polled by Thomson Reuters had expected adjusted
earnings per share of $1.91 on revenue of $2.42 billion.
Industrial gas sales decreased by 7.3% in the Americas--which
represents 35% of the topline--and by 6.1% in the Europe, Middle
East and Africa region. In Asia, sales climbed 7.2%. Sales in the
global industrial gas sales unit more than doubled. The company's
materials segment posted a 7.2% revenue increase to $447.6
million.
The company said it intends to spin off its materials
technologies business, to be known as Versum Materials, and is
currently "assessing market conditions to determine favorability
for a spinoff."
Shares, up 0.3% in the last three months, were inactive in
premarket trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
July 28, 2016 07:33 ET (11:33 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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