Air Products Reports Third Quarter EPS of 71 Cents
July 28 2004 - 8:00AM
PR Newswire (US)
Air Products Reports Third Quarter EPS of 71 Cents Access the Q3
Earnings Teleconference Scheduled for 10:00 a.m. Eastern Time (ET)
on July 28 by Calling (913) 981-5508 and Entering passcode 170301,
or Listen on the Web at
http://www.airproducts.com/Invest/EarningsReleases.htm; Access the
Teleconference Slides at
http://www.airproducts.com/Invest/EarningsReleases/Teleconference.htm
LEHIGH VALLEY, Pa., July 28 /PRNewswire-FirstCall/ -- Air Products
(NYSE:APD) today reported net income of $163 million or diluted
earnings per share (EPS) of $.71 for its third fiscal quarter ended
June 30, 2004. Results were up significantly from last year's net
income of $27 million or $.12 per share, which included an
after-tax charge of $96.6 million or $.43 per share for a global
cost reduction plan. Excluding this charge, net income was up 32
percent* and EPS was up 29 percent.* Sequentially, net income and
EPS increased 15 percent. Quarter revenues of $1,893 million were
up 16 percent from the prior year on strong Gases volumes including
acquisitions in the company's Electronics and Healthcare
businesses. Sequentially, revenues increased two percent, as
improved Gases volumes were partially offset by lower Chemicals
volumes. Operating income of $234 million was up 23 percent*
excluding the prior year charge and up 11 percent sequentially,
principally driven by volume gains. John P. Jones, Air Products'
chairman and chief executive officer, said, "Our excellent results
this quarter demonstrate that our people are executing our
strategies. We are very pleased with our Gases performance, which
posted strong volume gains delivering operating leverage to our
bottom line. Also, for the second quarter in a row, our return on
capital improved." Gases segment sales of $1,338 million increased
18 percent over the prior year on higher volumes across the
businesses. Record operating income of $213 million increased 26
percent* excluding the prior year charge. These results were
generated by higher volumes in the company's Energy and Process
Industries, Electronics, and Asian gas businesses. Volumes in both
the North American and European merchant gas businesses also
benefited from a pickup in manufacturing activity in these regions.
Chemicals segment sales of $453 million were up eight percent
versus the prior year, primarily on volume growth in the company's
Performance Materials business. Operating income of $30 million
increased three percent excluding the prior year charge*, as
positive volumes were largely offset by higher manufacturing costs.
Equipment segment revenues of $102 million increased over the prior
year on higher air separation plant sales. Operating income of $5
million increased on higher air separation and liquefied natural
gas (LNG) heat exchanger activity. Within the quarter, the company
received its third LNG heat exchanger order for the fiscal year.
Looking forward, Mr. Jones said, "Our outlook for the year is now
$2.60 to $2.65 - the top end of our original guidance for the year.
We are encouraged by our strong performance this quarter and the
positive trends we are seeing in our markets. For example, within
the last month, we announced new contracts supplying hydrogen to
four major North American refineries and a doubling of our liquid
capacity in southern China to support our leadership position
there." He continued, "Our highest priority is improving our return
on capital. Our strong cash flow, growth platforms, operating
leverage and productivity investments will deliver for our
shareholders." Air Products will continue to drive portfolio
management and cost reduction actions similar to prior years.
Upfront costs associated with such actions could reduce Air
Products' projected earnings for the current fiscal year. Air
Products (NYSE:APD) serves customers in technology, energy,
healthcare and industrial markets worldwide with a unique portfolio
of products, services and solutions, providing atmospheric gases,
process and specialty gases, performance materials and chemical
intermediates. Founded in 1940, Air Products has built leading
positions in key growth markets such as semiconductor materials,
refinery hydrogen, home healthcare services, natural gas
liquefaction, and advanced coatings and adhesives. The company is
recognized for its innovative culture, operational excellence and
commitment to safety and the environment. With annual revenues of
$6.3 billion and operations in over 30 countries, the company's
18,500 employees build lasting relationships with their customers
and communities based on understanding, integrity and passion. For
more information, visit http://www.airproducts.com/. NOTE: The
forward-looking statements contained in this presentation are based
on current expectations regarding important risk factors. Actual
results may differ materially from those expressed. Factors that
might cause forward-looking statements to differ materially from
actual results include, among other things, overall economic and
business conditions different than those currently anticipated and
demand for Air Products' goods and services; competitive factors in
the industries in which it competes; interruption in ordinary
sources of supply; the ability to recover unanticipated increased
energy and raw material costs from customers; uninsured litigation
judgments or settlements; spikes in the pricing of natural gas;
changes in government regulations; consequences of acts of war or
terrorism impacting the United States' and other markets; charges
related to currently unplanned portfolio management and cost
reduction actions; the success of implementing cost reduction
programs; the timing, impact and other uncertainties of future
acquisitions or divestitures; significant fluctuations in interest
rates and foreign currencies from that currently anticipated; the
impact of tax and other legislation and regulations in
jurisdictions in which Air Products and its affiliates operate; and
the timing and rate at which tax credits can be utilized. *This
press release contains non-GAAP measures, which exclude the impact
of the 2003 global cost reduction plan charge. The presentation of
these non- GAAP measures is intended to enhance the usefulness of
financial information by providing measures which are indicators of
the company's baseline performance. The company's management uses
these non-GAAP measures internally to evaluate its business and as
a basis for forecasting future periods. The table below presents a
reconciliation of GAAP measures to non-GAAP measures: Three Months
Ended 30 June 2003 Millions of dollars, except per share 2003
Global Q3FY'04 Cost vs. Q3FY'04 Reduction Non- Q3FY'03 vs. GAAP
Plan GAAP Non- Q3FY'03 Basis Charge Measures GAAP GAAP Operating
Income Gases $76.5 $92.2 $168.7 26% 178% Chemicals (29.2) 58.1 28.9
3% 202% Equipment (.6) 2.4 1.8 All Other (9.4) -- (9.4)
Consolidated $37.3 $152.7 $190.0 23% 527% Net Income $26.6 $96.6
$123.2 32% 513% Diluted EPS $.12 $.43 $.55 29% 492% Please review
the attached financial tables, including the Summary of
Consolidated Financial Information: AIR PRODUCTS AND CHEMICALS,
INC. SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION (Unaudited)
(Millions of dollars, except per share) Three Months Ended Nine
Months Ended 30 June 30 June 2004 2003 2004 2003 Sales $1,892.5
$1,629.9 $5,433.9 $4,655.0 Income Before Cumulative Effect of
Accounting Change $163.0 $26.6(a) $436.0 $268.9(a) Cumulative
Effect of Accounting Change -- -- -- (2.9) Net Income $163.0
$26.6(a) $436.0 $266.0(a) Basic Earnings Per Share: Income Before
Cumulative Effect of Accounting Change $.73 $.12(a) $1.95 $1.23(a)
Cumulative Effect of Accounting Change -- -- -- (.02) Net Income
$.73 $.12(a) $1.95 $1.21(a) Diluted Earnings Per Share: Income
Before Cumulative Effect of Accounting Change $.71 $.12(a) $1.91
$1.21(a) Cumulative Effect of Accounting Change -- -- -- (.02) Net
Income $.71 $.12(a) $1.91 $1.19(a) Capital Expenditures $203.3
$152.8 $582.6 $692.5 Depreciation $173.9 $164.7 $515.5 $477.1 (a)
Included an after-tax charge of $96.6, or $.43 per share, for a
global cost reduction plan. DATASOURCE: Air Products CONTACT: Media
Inquiries: Katie McDonald, +1-610-481-3673, , or Investor
Inquiries: Phil Sproger, +1-610-481-7461, , both of Air Products
Web site:
http://www.airproducts.com/Invest/EarningsReleases/Teleconference.htm
Web site: http://www.airproducts.com/Invest/EarningsReleases.htm
Web site: http://www.airproducts.com/
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