Industrial gas producer and supplier, Praxair Inc's (PX) Canadian unit, Praxair Canada recently acquired five operating units of Airgas Inc. (ARG) for an undisclosed amount.
The acquisition comprises the branches located at Calgary, Red Deer, and Edmonton, Alberta, and Regina and Saskatoon, Saskatchewan in western Canada. The acquisitions will enable Praxair to better access the medical homecare and industrial markets in the region.
In its first quarter 2012, the company fared well posting an EPS of $1.38, up 1.5% year over year and two cents above the Zacks Consensus Estimate. Revenue gained 5% y/y on the back of the company’s stellar performance in North American and Asian markets.
Praxair's North American operations accounted for nearly 49% of its total revenue, major markets being U.S., Mexico and Canada. North American revenue grew 5.5% in the first quarter due to healthy demands from energy, manufacturing and metals markets.
Our hopes soar high witnessing continuous healthy performance in these geographies. Moreover, the company's earnest effort in returning values to shareholders through dividends and share buybacks makes the stock all the more attractive.
We foresee solid long-term growth prospects for Praxair as the company works to achieve its long-term targets of annual organic sales growth of 8%-12%; operating profit growth of 10%-15%, and earnings growth of 12%-18% by 2015.
The current Zacks Consensus Estimate for the second quarter of 2012 is $1.44, representing a year-over-year increase of 4.57%. Estimates for the fiscal years 2012 and 2013 are $5.85 and $6.65, reflecting annual growth of 7.69% and 13.77%, respectively.
We maintain a Neutral recommendation on Praxair. Currently, the stock carries a Zacks #3 Rank, implying a short-term (1-3 months) Hold rating.
AIRGAS INC (ARG): Free Stock Analysis Report
PRAXAIR INC (PX): Free Stock Analysis Report
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