Air Products reports higher volumes, diluted earnings per share

Air Products reports higher volumes, but diluted earnings per share

4:00 PM, 26th July 2011
Air Products reports higher volumes, but diluted earnings per share
John McGlade, Chairman, President and CEO, Air Products.

  • Record EPS from continuing operations of $1.46
  • Sales of $2.6 billion, up 14 per cent versus prior year
  • Fourth quarter EPS expected to be $1.48 to $1.53

PENNSYLVANIA, US: Air Products reported net income from continuing operations of $318 million, up 15 per cent versus prior year and diluted earnings per share from continuing operations of $1.46, up 14 per cent, for its fiscal third quarter ended June 30, 2011.

These results exclude a $0.04 gain in discontinued operations recognizing a tax benefit from the sale of the company’s US healthcare operations in 2009.

Third quarter revenues of $2,578 million increased 14 per cent from the prior year. On an underlying basis, sales were up seven per cent on higher volumes primarily in the electronics and performance materials and tonnage segments. Operating income of $417 million rose 11 per cent from the prior year on higher volumes.

“We continued to see strong volume growth across a number of our businesses. Growth in the Asia merchant business and more broadly in the energy and electronics markets was strong, while both the US and Europe merchant businesses were slower. This quarter, as expected, we saw a significant number of planned customer maintenance outages in our tonnage segment. We remain very disappointed by the continued higher operating and maintenance costs in our merchant segment and are taking the necessary steps to improve performance,” said John McGlade, Chairman, President and CEO, Air Products.

Merchant gases sales of $1,027 million increased 12 per cent versus prior year on higher volumes, primarily in Asia, positive pricing in North America and Asia, and favourable currency. Operating income of $182 million improved three per cent versus prior year with increased volumes mostly offset by higher operating costs and pricing pressure in Europe.

Tonnage gases sales of $869 million were up 20 per cent from the prior year primarily on higher volumes and higher energy and raw material cost pass-through. Operating income of $115 million declined four per cent.

Electronics and performance materials sales of $602 million improved 21 per cent over the prior year on higher volumes. Operating income of $109 million increased 75 per cent on higher volumes and continued strong cost performance. Electronics sales increased 24 per cent and performance materials sales grew 18 per cent versus prior year. 

Equipment and energy sales of $80 million were down 31 per cent versus the prior year on lower ASU sales. Operating income of $9 million declined significantly on lower sales and a prior year gain on an asset sale.

Air Products expects fourth quarter EPS to be between $1.48 and $1.53 per share and the full fiscal year EPS to be between $5.70 and $5.75 per share. Last month, Air Products unveiled new financial targets for the 2015 timeframe. The company expects to deliver top line growth of 11 per cent to 13 per cent per year over the next four years, which would bring its total revenues to more than $15 billion in 2015. Air Products also expects to improve its operating margin to 20 per cent and its return on capital to 15 per cent by 2015.

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