Air Products Launches New Mill - Analyst Blog
June 21 2011 - 4:30AM
Zacks
Air Products &
Chemicals Inc. (APD) intends to launch its new PolarFit
ultra-fine-grinding mill at PTX Canada in Toronto starting from
June 21 to June 23. The new PolarFit ultra-fine-grinding mill
offers advance technology while providing a cost-effective way to
reduce hard-to-grind materials to smaller particle sizes that can
be achieved with conventional impact mills.
The new grinding system can produce
consistent yields of particles between 45 and 250 microns and in
some cases as small as 10 microns, to best suit the individual
customer needs. The new mill eliminates the need for Air Products
ultra-fine-grinding mill, which uses a combination of size
reduction mechanisms, including impact, attrition and
particle-particle collision, to achieve much smaller particle sizes
than other mills.
Through its efficient use, Air
Products mill can improve product quality resulting from minimal or
no heat damage; reduce waste and recycling and lower production
costs.
The mill is ideal for cryogenic
size reduction of a wide range of materials, including pigments,
plastics, powder coatings, thermoplastic elastomers, waxes,
pharmaceuticals, nutraceuticals, spices and other food
products.
Based in Pennsylvania, Air Products
benefits from a long-term take-or-pay contract, a consolidated
industry structure, a diverse customer base and sustained pricing
power. Air Products’ aggressive cost cutting and productivity
initiatives, combined with its portfolio realignment efforts, have
helped to mitigate fixed cost headwinds, which is very
encouraging.
However, soaring energy and raw
material costs pose a threat to margin expansion. In order to
compensate for escalating raw material costs, Air Products has been
increasing the price of a range of chemicals it manufactures for
industrial use.
In April 2011, the company reported
second-quarter fiscal 2011 EPS of $1.39 versus $1.16 in the
year-earlier quarter and matched the Zacks Consensus Estimate of
$1.39. The results included an after-tax cost of $4 million or 2
cents per share, excluding which the adjusted EPS amounted to $1.41
versus $1.23 in the year-ago quarter.
Net sales amounted to $2.5 billion
versus $2.2 billion in the prior-year quarter, moving ahead of the
Zacks Consensus Estimate of $2.4 billion. The improved results were
mainly driven by higher volumes in the Electronics and Performance
Materials, Merchant Gases and Tonnage Gases segments.
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.
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