Airgas Inc.'s (ARG) fiscal third-quarter profit rose 19% as
higher revenue more than offset charges related to a hostile
takeover bid from rival Air Products & Chemicals Inc.
(APD).
The special-gas provider also raised the low end of its
fiscal-year adjusted earnings forecast by 6 cents, now projecting
$3.28 to $3.32 a share. It was the third time the company raised
its outlook for the year.
"Growth is now accelerating in our core business on strength in
our manufacturing, utilities and petrochemical customer segments,
as well as in repair and maintenance activity, particularly at our
larger customers," Chief Executive Peter McCausland said. "Although
we have yet to see meaningful recovery in energy and infrastructure
construction, the outlook is improving."
Airgas has benefited from recovering industrial demand after
woefully low levels set during the recession. Larger rival Air
Products has been pushing a hostile takeover bid for the company
for almost a year.
Airgas has repeatedly rejected the bid, which most recently
valued the company at nearly $5.9 billion or $70 a share, saying
the offer undervalues it. Airgas board members say the company is
worth at least $78 a share.
For the quarter ended Dec. 31, Airgas reported a profit of $55.8
million, or 65 cents a share, up from $46.9 million, or 56 cents a
share, a year earlier.
Excluding the costs related to the takeover offer,
debt-extinguishment costs and pension impacts, adjusted earnings
rose to 80 cents a share from 65 cents. The company in October
projected earnings of 76 cents to 80 cents a share.
Revenue rose 9.5% to $1.03 billion, meeting Wall Street's
expectation for $1.03 billion.
Operating margin narrowed slightly to 10.5% from 10.6%. After
accounting for costs related to the takeover attempt and other
charges, adjusted operating margin rose to 12.2% from 11.1%.
For the fourth quarter, the company projected an adjusted profit
of 82 cents to 86 cents a share, in line with analysts polled by
Thomson Reuters, who are estimating 84 cents.
Shares were up 0.7% premarket at $63.98.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
Andrew.FitzGerald@dowjones.com;