Air Products (APD) reported its fiscal Q1 with a GAAP EPS of $2.73 and an adjusted EPS of $2.82.

Air Products, a global leader in industrial gases, has recently announced its fiscal 2024 first quarter results, marking a period of steady growth amid challenging global conditions. This report delves into the company’s performance, comparing actual results against expectations, providing forward-looking guidance, and examining recent changes in stock price.

EPS and Revenue Falls Short of Expectation for APD in Fiscal Q1

The fiscal 2024 first quarter saw Air Products reporting a GAAP EPS of $2.73, a 6% increase from the previous year, alongside an adjusted EPS of $2.82, reflecting a 7% growth. This growth is attributed to higher equity affiliates’ income, improved pricing, and increased volumes, despite facing higher costs. GAAP net income rose to $622 million, up by 6%, with the GAAP net income margin expanding by 230 basis points to 20.7%.

Adjusted EBITDA also saw an 8% rise to $1.2 billion, with its margin increasing significantly by 510 basis points to 39.2%. These figures underscore the company’s ability to navigate through the pressures of higher costs and demonstrate effective cost management and operational efficiency.

The reported results fell short of market expectations despite the company’s growth. Analysts had anticipated an EPS of $3 and revenue projections of $3.02 billion, signaling a slight discrepancy between expectations and actual performance. This variance can be attributed to several factors, including a slowdown in manufacturing in Asia, particularly in China, reduced helium demand, and cost headwinds from a sale of equipment project. Furthermore, currency devaluation in Argentina also played a role. This shortfall highlights the impact of geopolitical and economic headwinds on the company’s operations, particularly in key markets.

Guidance

Looking ahead, Air Products has updated its fiscal 2024 full-year adjusted EPS guidance to a range of $12.20 to $12.50, representing a 6% to 9% increase over the previous year’s adjusted EPS. For the fiscal 2024 second quarter, the company anticipates an adjusted EPS of $2.60 to $2.75. Additionally, capital expenditures are expected to remain between $5.0 billion to $5.5 billion for the full year. This guidance reflects the company’s optimism in its growth trajectory and strategic initiatives, despite current market challenges. Air Products’ focus on its core industrial gases business and leadership in low-carbon intensity hydrogen projects underscores its commitment to sustainable growth and innovation.

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