Air Products and Chemicals Inc. (APD) announced that it has added a new capacity to its electronic specialty materials manufacturing facility in Hometown, Pennsylvania. The company has expanded its high-purity hydrogen selenide (H2Se) production capabilities at the facility.
The new capacity will serve the growing Copper Indium Gallium Selenium (CIGS) thin-film solar cell manufacturing market. The company delivers quality materials as per the customers’ requirements and provides H2Se to its semiconductor and photovoltaic customers at almost 100% purity levels.
In January 2012, Air Products released its first-quarter results for fiscal 2012 ended December 31, 2011. The company reported an EPS of $1.36 in the quarter versus $1.35 in the year-earlier quarter, in line with the Zacks Consensus Estimate.
Net sales amounted to $2.4 billion, up 1% year over year, but down 7% sequentially. The increase was attributable to higher prices in Merchant Gases and Performance Materials. However, sales were below the Zacks Consensus Estimate of $2.5 billion.
Looking ahead, management expects second-quarter 2012 results to remain disappointing. However, growth in Asia and North America is expected to accelerate in the second half of 2012. Besides, improved operating performance along with new plant on-streams will lead to stronger sales and earnings growth in the later half of 2012. The company’s recent orders, strong project backlog and robust bidding activity position it well to achieve 2015 goals for growth, margin and returns.
Air Products expects second-quarter EPS between $1.37 and $1.43. The company continues to maintain EPS guidance in the range of $5.90 to $6.30 for fiscal 2012.
Air Products benefits from a consolidated industry structure, diverse customer base and sustained pricing power. However, soaring energy and raw material costs pose a threat to margin expansion. The company faces stiff competition from Praxair Inc. (PX).
As a result, the company retains a Zacks #3 Rank on its shares, which translates into a short-term (1 to 3 months) “Hold” rating and we have recommended the shares of the company as “Neutral” for the long term (more than 6 months).
AIR PRODS & CHE (APD): Free Stock Analysis Report
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