DOW JONES NEWSWIRES
Air Products & Chemicals Inc.'s (APD) fiscal first-quarter
earnings fell 7.6% as the industrial-gas company saw continued
weakness in its equipment and energy segment and slower growth in
its three other major segments.
The company forecast second-quarter earnings at $1.37 to $1.43 a
share, below estimates of $1.48 a share from analysts polled by
Thomson Reuters. It said it expects slow economic activity in the
period but predicted Asia and North America growth would accelerate
in the second half of the year.
The specialty-gas supplier and chemical maker had also warned of
softer first-quarter results due to economic uncertainty but said
it was well-positioned with a large backlog of projects.
This month, the company agreed to sell its continental European
home care business to Linde AG (LNEGY, LIN.XE) for EUR590 million
as it looks to focus on its core gases business. It is also
evaluating options for its remaining home care interests in the
U.K., Ireland, Argentina and Brazil. Air Products had seen
double-digit earnings growth and higher volume recently thanks to
Asian demand, and the company hopes to continue that momentum with
stepped-up investments in China and India.
For the period ended Dec. 31, Air Products reported a profit of
$248.1 million, or $1.16 a share, down from $268.6 million, or
$1.23 a share, a year earlier. Adjusted earnings were $1.36, up
from $1.35. In October, the company predicted per-share earnings of
$1.31 to $1.39.
Revenue increased 1.3% to $2.42 billion, below analysts'
expectations of $2.53 billion.
Gross margin narrowed to 26.8% from 28.1%.
Sales in the company's merchant gases segment were flat as lower
volumes were offset by higher pricing. Air Products' tonnage gases
segment, which provides gases to refineries and steelmaking
industries, reported 6% higher revenue on improved volume from new
plants. Sales in electronics and performance materials rose 2% on
higher pricing and volume, while equipment and energy sales fell
21%, due to lower liquefied natural gas and air separation unit
activity.
Shares of the company, which backed its full-year guidance,
closed Monday at $89.92 and were inactive premarket. The stock is
up 8.1% over the past three months.
--By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108;
ben.rubin@dowjones.com