Praxair Starts New Unit in Alabama - Analyst Blog
May 11 2011 - 5:00AM
Zacks
Praxair Inc. (PX)
recently announced the commencement of operations at a new air
separation unit in Mobile, Alabama. The unit with daily capacity of
400 tons will supply industrial gases to ThyssenKrupp’s
state-of-the-art carbon and stainless steel processing
facilities.
Additionally, the unit will also
satisfy the demand for liquefied natural gases for the company’s
merchant customer base. ThyssenKrupp is an integrated materials and
technology group operating in more than 80 countries.
Praxair, one of the leading
companies engaged in the production and distribution of industrial
gases, has significant growth opportunities in diverse markets. Its
concerted effort in increasing exposure and tapping opportunities
in the emerging markets is also very encouraging. Further, the new
unit in Alabama will help the company serve its customer better in
the region.
Moreover, the growth prospects of
industrial gas producers are very bright with demand for gases
rising due to their wide application areas, including chemical
processing and petroleum refining, metal production and
fabricating, and electronics and health care industries.
Praxair anticipates that EPS would
be roughly $5.35–$5.45 and revenue to be approximately $11 billion
for fiscal year 2011. For the second quarter, the company
anticipates earnings to be roughly within $1.33–$1.38 range.
However, excessive dependence on
international revenue and energy costs, both volatile in nature, is
risky. The company also operates in a highly-competitive
environment, which may adversely affect its top-line results.
Praxairfaces stiff competition from its peers Air Products
and Chemicals Inc. (APD) and Airgas Inc.
(ARG).
We currently maintain a Neutral
recommendation on the stock.
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PRAXAIR INC (PX): Free Stock Analysis Report
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