Air Products & Chemicals Inc. (APD) announced the completion of its current $1 billion share repurchase program with the repurchase of $299 million shares this quarter. Air Products also announced that its board authorized a new $1 billion share repurchase program.

As of August 31, 2011, Air Products had 210 million shares outstanding.

On September 15, 2011, the board of directors of Air Products also declared a quarterly dividend of 58 cents per share of common stock, to be payable on November 14, 2011 to shareholders of record at the close of business on October 3, 2011.

Air Products is one of 23 companies worldwide and one of four U.S.-based firms to be named to the Carbon Disclosure Project's (CDP) Global Disclosure and Performance Leadership Indexes for 2011.

Effective October 01, 2011, Air Products also plans to increase product pricing by 5 to 10% for liquid oxygen, liquid nitrogen, liquid argon, liquid and bulk hydrogen; and monthly service charges by 3 to 5% for merchant customers in North America.

In July 2011, the company reported third-quarter fiscal 2011 EPS of $1.46 versus $1.17 in the year-earlier quarter, in line with the Zacks Consensus Estimate of $1.46. The results exclude a 4-cent gain in discontinued operations recognizing a tax benefit from the sale of the company's U.S. healthcare operations in 2009.

Net sales amounted to $2.6 billion versus $2.3 billion in the prior-year quarter, outshining the Zacks Consensus Estimate of $2.5 billion. The improved results were mainly driven by higher volumes in the Electronics and Performance Materials and Tonnage Gases segments.

The company witnessed strong volume growth across a number of businesses, mainly in the Asia Merchant business and the energy and electronics markets. However, the U.S. and Europe Merchant businesses witnessed slower growth.

For the quarters ahead, the company forecasts strong revenue growth in the Tonnage and Electronics and Performance Materials segments. The company also expects to improve margins in the next quarter based on its actions to improve Merchant segment performance.

Management expects fourth-quarter EPS between $1.48 and $1.53. The company raised the full fiscal year EPS guidance between $5.70 and $5.75 per share from $5.65 and $5.75 previously.

Last month, the company also announced new financial targets for the 2015 timeframe. The company expects to deliver top-line growth of 11% to 13% per year over the next four years, boosting its total revenue to over $15 billion in 2015. Air Products also expects to improve its operating margin to 20% and its return on capital to 15% by 2015.

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. 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 for a range of chemicals it manufactures for industrial use. Air Products faces stiff competition from Praxair Inc. (PX) and The Linde Group.

We currently have a Zacks #3 Rank (short-term Hold recommendation) on the stock.


 
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