Air Products & Chemicals Inc. (APD) plans to build a 12-acre solar farm at its corporate headquarters in Allentown, capable of generating 2 MW of electricity. The 2 MW is enough to serve the energy needs of nearly half of Air Products' administration buildings. The project is expected to begin construction this fall and be on stream in 2011.
Air Products has been supplying critical gases and materials to photovoltaic (PV) manufacturers, who make solar panels for many years as part of its leadership in the electronics industry, and more recently, has been focusing on reducing PV manufacturing costs with its broad SunSource Solutions offerings.
The solar farm is made possible through investment by Air Products and a $1 million grant from Commonwealth of Pennsylvania as part of its 2008 Alternative Energy Funding Bill. Funding is administered by Pennsylvania's Commonwealth Financing Authority.
By utilizing the 2MW of renewable power, Air Products reduces its dependence on purchased electricity, thereby lowering its carbon dioxide (CO2) footprint by more than 1,000 tons per year.
In June 2011, the company at an Investor Conference announced new financial targets for 2015 to take the company to a new level of performance.
The company announced that profit margins will expand 3 percentage points through 2015 and sales will rise about 12% annually, led by growth in energy and electronics markets.
Air Products expects revenues to surpass $15 billion in 2015, up from $9 billion last year. The company forecasts operating margins to increase to 20% by 2015 from 17%, which will be an improvement of 300 basis points. The return on capital is expected to increase by 150 basis points to 15% from 2011 to 2015.
With these results, the company expects to deliver enhanced revenue growth and sustained margin and return improvement. The company has a record of setting and meeting its long-term goals and has a strong presence in the energy, environmental and emerging markets worldwide.
Thus, by implementing these strategic actions, the company expects to continue to lower its costs, improve returns and gain a greater competitive advantage over its peers.
Air Products faces stiff competition from Praxair Inc. (PX).
Currently, Air Products has a short-term (1 to 3 months) Zacks #2 Rank (Buy) but a long- term Neutral recommendation.
AIR PRODS & CHE (APD): Free Stock Analysis Report
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