Air Products' Q3 Earnings & Revenues Beat Estimates

Air Products and Chemicals, Inc. (APD - Free Report) beat earnings expectations in third-quarter fiscal 2017 (ended Jun 30, 2017).

The industrial gases giant logged third-quarter adjusted earnings of $1.65 per share, up 15% from the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.60.

Net income from continuing operations, as reported, fell 58% year over year to $104 million or 47 cents per share. Cost of sales for the reported quarter rose roughly 12.6% year over year to around $1.5 billion. Selling and administrative expenses increased 9.6% year over year to $184.5 million.

Revenues rose 11% year over year to $2.12 billion in the reported quarter, beating the Zacks Consensus Estimate of $2.05 billion. An 8% increase in volumes and 5% favorable energy pass-through more than offset the currency headwinds of 2% in the quarter.

Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise

 

Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise | Air Products and Chemicals, Inc. Quote

Segmental Highlights

Revenues from the Industrial Gases – America segment grew 12% year over year to $930 million in the reported quarter, supported by 9% rise in energy pass-through and 3% increase in volumes. 

Sales from the Industrial Gases – Europe, Middle East, and Africa (EMEA) segment rose 5% year over year to $542 million due to 6% higher volumes and 4% favorable energy pass-through, partly offset by 4% unfavorable currency and 1% lower pricing.

Sales from the Industrial Gases – Asia segment went up 20% year over year to $538 million on the back of 20% increase in volumes. 

Financial Position

Air Products ended third-quarter fiscal 2017 with cash and cash equivalents of $2,332.6 million, a whopping 353.1% year over year surge. Total long-term debt fell around 14.2% year over year to $ 3,366.6 million.

Outlook                                                                     

Air Products has increased its adjusted earnings per share guidance for the full year. For fiscal 2017, Air Products expects adjusted earnings per share of $6.20–$6.25 (up from $6.00-$6.25 expected earlier), which at midpoint, represents a 10% increase over last year. For the fourth-quarter fiscal 2017, Air Products anticipates adjusted earnings per share from continuing operations of $1.65–$1.70 per share, which at midpoint, also represents a 12% increase over last year.

The company expects capital expenditures of roughly $1 billion in fiscal 2017.

Price Performance

Air Products’ shares have moved up 2.1% in the last six months, underperforming the industry’s 6.6% gain.

Zacks Rank & Stocks to Consider

Air Products currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies in the basic materials space include Akzo Nobel N.V. (AKZOY - Free Report) , Arkema S.A. (ARKAY - Free Report) and Hitachi Chemical (HCHMY - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Akzo Nobel has an expected long-term earnings growth of 11.1%.

Arkema has an expected long-term earnings growth of 12.4%.

Hitachi Chemical has an expected long-term earnings growth of 5%.