Industrial gas giant Air Products and Chemicals Inc. (APD) posted first-quarter fiscal 2015 (ended Dec. 31, 2014) adjusted earnings of $1.55 a share, up roughly 15.7% from $1.34 a share reported in the year-ago quarter. The results also beat the Zacks Consensus Estimate of $1.49.
Adjusted earnings exclude one-time items including charges of $21.7 million associated with business restructuring and cost reduction actions and gain on previously held equity interest of $11.2 million.
Net income from continuing operations, as reported, rose roughly 13% to $324.6 million or $1.50 per share in the quarter from $287.1 million or $1.34 per share recorded in the year-ago quarter.
Revenues rose 0.6% year over year to $2,560.8 million driven by higher volumes and pricing. However, it missed the Zacks Consensus Estimate of $2,676 million.
Underlying sales, barring the company’s exit from the Polyurethane Intermediates (“PUI”) business, rose 5% year over year. Sales rose on the back of 4% increase in volumes and strength across most segments.
Segmental Highlights
Revenues from the Industrial Gases-America segment rose 6% year over year to $1,003 million aided by higher volumes in North America and favorable pricing. However, sequentially, underlying sales declined 1%, mainly due to seasonality in North America.
Sales from the Industrial Gases – Europe, Middle East, and Africa (EMEA) segment declined 9% from the year-ago quarter to $501 million owing to a 7% unfavorable currency impact. Underlying sales, however, were flat with modest liquid bulk volume gains offset by weaker packaged gases.
Sales from Industrial Gases – Asia segment rose 1% year over year to $399 million due to a 6% increase in volumes mainly from new plants coming on stream.
Revenues from the Materials Technologies segment increased 9% year over year to $524 million owing to 11% higher volumes. Sales of Electronics Materials went up 13% while Performance Materials sales rose 6% year over year on volume growth in all business units.
Financial Position
Air Products ended the quarter with cash and cash equivalents of $238.8 million, down roughly 38 % year over year. Long-term debt fell around 5 % year over year to $4,751.3 million. Operating cash flow for the quarter decreased roughly 11% year over year to $486.6 million.
Outlook
Air Products expects its earnings from continuing operations for second-quarter fiscal 2015 to be in the range of $1.50–$1.55 per share. For fiscal 2015, it anticipates earnings from continuing operations of $6.35–$6.55 per share.
The company forecasts capital expenditure for fiscal 2015 to be between $1.7 billion and $1.9 billion.
Air Products currently holds a Zacks Rank #3 (Hold).
Better-ranked stocks in the chemical industry include Compass Minerals International Inc. (CMP), Innophos Holdings Inc (IPHS) and Olin Corp. (OLN). All of these stocks hold a Zacks Rank #1 (Strong Buy).
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