Air Products and Chemicals Inc.APD has landed a long-term agreement with Bharat Petroleum Corporation Limited (BPCL) to build, own and operate a new syngas production facility at the BPCL Kochi Refinery in India.
Per the deal, the company will supply syngas to BPCL's new Propylene Derivatives Petrochemical Project (PDPP). This marks Air Products second supply contract with BPCL in Kochi. Air Products has been operating a world-scale industrial gas complex at the same location to support the BPCL Integrated Refinery Expansion Project (IREP).
The latest facility will utilize Air Products' proprietary cryogenic gas separation technologies to produce a hydrogen/carbon monoxide syngas, which will feed the new PDPP. Through this, BPCL will be able to serve the growing domestic market in India. In fact, the syngas unit will complement Air Products' on-going operations of industrial gas complex that now supplies hydrogen, nitrogen, oxygen and steam to BPCL's Kochi Refinery.
Air Products’ shares have moved up 21.4% in a year, underperforming the industry’s 26.4% gain.
In first-quarter fiscal 2018, the company reported adjusted earnings of $1.79 per share, up 22% from the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of $1.66. Also, revenues were $2,216.6 million, up around 18% year over year. The figure outpaced the consensus mark of $2,159.2 million.
For fiscal 2018, the company anticipates adjusted earnings in the range of $7.15-$7.35 per share, up 13-16% from the prior year. The guidance includes an expected benefit of 20-25 cents per share from the U.S. Tax Cuts and Jobs Act. For the fiscal second quarter, Air Products expects the same in the band of $1.65-$1.70 per share. Also, it projects capital expenditure of $1.2-$1.4 billion for the current year.
Moreover, Air Products has built a strong project backlog. These projects are anticipated to be accretive to earnings and cash flow over the next few years. In addition, strategic investments in high-return projects, new business deals and acquisitions are expected to drive results in fiscal 2018. The company also remains on track with delivering on cost-reduction programs, which is likely to support margins.
Air Products and Chemicals, Inc. Price and Consensus
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