APD Air Products and Chemicals Inc

Air Products & Chemicals Inc.’s (APD) PRISM VSA Oxygen Generation System is now officially supplying Gerdau Steel's Whitby, Ontario, Canada facility with over 200 tons per day of oxygen for its steelmaking plant.

Air Products won this long-term contract, which also includes liquid nitrogen and liquid oxygen supply, by demonstrating the versatile flexibility of the PRISM system as the right fit for Gerdau's production schedule.

Recently, Air Products reported its fourth-quarter 2011 EPS of $1.51 versus $1.35 in the year-earlier quarter, in line with the Zacks Consensus Estimate of $1.51. For full-year 2011, the company reported EPS of $5.73, up 14% year over year, matching the Zacks Consensus Estimate of $5.73.

Net sales amounted to $2.6 billion versus $2.4 billion in the prior-year quarter, in line with the Zacks Consensus Estimate of $2.6 billion. The improved results were mainly driven by growth in the emerging markets and strong performance in its Tonnage Gases business. Despite a slowing global economy in the second half of 2011, the company won several projects and also witnessed double-digit sales and earnings growth.

For fiscal 2011, sales increased 12% year over year to $10,082 million driven by a 9% volume increase, which was in line with the Zacks Consensus Estimate.

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.

 
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