Air Products Reports Fourth Quarter EPS of 73 Cents
October 27 2004 - 8:00AM
PR Newswire (US)
Air Products Reports Fourth Quarter EPS of 73 Cents Access the Q4
earnings teleconference scheduled for 10:00 a.m. Eastern Time (ET)
on October 27 by calling (719) 457-2649 and entering passcode
841282, or listen on the Web at
www.airproducts.com/Invest/financialnews/EarningsReleases.htm.
Access the teleconference slides at
www.airproducts.com/Invest/financialnews/Earnings_Releases/Teleconference.htm.
LEHIGH VALLEY, Pa., Oct. 27 /PRNewswire-FirstCall/ -- Air Products
(NYSE:APD) today reported net income of $168 million or diluted
earnings per share (EPS) of $.73 for its fourth fiscal quarter
ended September 30, 2004. Net income increased 28 percent and
diluted EPS increased 26 percent over the prior year. Record
quarter revenues of $1,978 million were up 20 percent from the
prior year on strong Gases volumes, particularly in the company's
growth businesses. Sequentially, revenues increased four percent on
improved Gases and Chemicals volumes. Operating income of $237
million was up 27 percent versus the prior year and one percent
sequentially, principally driven by volume gains. Commenting on the
quarter, John P. Jones, Air Products' chairman and chief executive
officer, said, "This was another solid quarter, as our growth
businesses delivered strong volume performance. Our return on
capital improved as we continued to load our existing asset base."
Gases segment sales of $1,396 million increased 22 percent over the
prior year on higher volumes across the businesses, particularly
electronics, refinery hydrogen, healthcare and Asia. Record
operating income of $216 million increased 20 percent, driven
mainly by strong volumes, favorable currency effects and
acquisitions. Sequentially, gases revenues increased four percent
due to stronger volume performance, mainly in electronics and
refinery hydrogen. Operating income was up one percent as volume
gains were partially offset by higher operating costs. Chemicals
segment sales of $483 million were up 16 percent versus the prior
year, primarily on strong volumes across the businesses. But higher
raw material and manufacturing costs offset these gains, with
operating income down nine percent to $27 million. Sequentially,
chemicals revenues increased seven percent, mainly on higher
volumes in polyurethane intermediates and epoxy additives.
Operating income was down 10 percent. Equipment segment revenues of
$99 million increased 24 percent over the prior year on higher air
separation plant and liquefied natural gas (LNG) heat exchanger
sales. Operating income also increased on higher LNG activity. For
fiscal 2004, Air Products' sales of $7.4 billion increased 18
percent. Approximately half of this increase was associated with
higher volumes, while the remainder was principally due to
acquisitions and favorable currency effects. Net income of $604
million was up 22 percent* and diluted EPS of $2.64 was up 19
percent* excluding last year's global cost reduction charge.
Reflecting on the year, Jones said, "We built our positions serving
growth markets and geographies, further improved our portfolio,
strengthened our customer relationships and drove up return on
capital. We also set the foundation for improving our productivity
by bringing more than 70 percent of our businesses onto SAP and
driving continuous improvement efforts." "We anticipate another
solid year of improvement in 2005, driven by a step-change in
productivity and modest global economic growth, which will help us
load our existing asset base and further improve our return on
capital. In Gases, we expect continued growth in our electronics,
refinery hydrogen, healthcare and Asian businesses. We know we must
fix our Chemicals business, and we are committed to delivering
significant margin improvements through pricing actions and
managing our raw material costs. And in Equipment, we expect
improved performance from stronger LNG demand. Given this outlook,
we are providing a fiscal 2005 guidance range of $2.90 to $3.10,
which includes an estimated $.10 to $.15 of costs associated with
achieving our increased productivity targets." Jones added that Air
Products expects fiscal 2005 first quarter EPS in the range of $.67
to $.70, up 16 to 21 percent from $.58 in the first quarter of
fiscal 2004. 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
and is listed in the Dow Jones Sustainability and FTSE4Good
Indices. The company has annual revenues of $7.4 billion,
operations in over 30 countries, and nearly 20,000 employees around
the globe. For more information, visit http://www.airproducts.com/.
NOTE: The forward-looking statements contained in this release 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: Twelve Months Ended 30 September
Millions of dollars, except per share FY03 2003 FY03 FY04 FY04 FY04
GAAP Global Non-GAAP GAAP Vs Vs Basis Cost Measures Basis FY03 FY03
Reduction GAAP Non- Plan Basis GAAP Charge Basis Net Income $397.3
$96.5 $493.8 $604.1 52% 22% Diluted EPS $1.78 $.43 $2.21 $2.64 48%
19% 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 Twelve Months Ended 30 September 30 September 2004 2003 2004
2003 Sales $1,977.5 $1,642.3 $7,411.4 $6,297.3 Income Before
Cumulative Effect of Accounting Change $168.1 $131.3 $604.1 $400.2
(a) Cumulative Effect of Accounting Change -- -- -- (2.9) Net
Income $168.1 $131.3 $604.1 $397.3 (a) Basic Earnings Per Share:
Income Before Cumulative Effect of Accounting Change $.75 $.59
$2.70 $1.82 (a) Cumulative Effect of Accounting Change -- -- --
(.01) Net Income $.75 $.59 $2.70 $1.81 (a) Diluted Earnings Per
Share: Income Before Cumulative Effect of Accounting Change $.73
$.58 $2.64 $1.79 (a) Cumulative Effect of Accounting Change -- --
-- (.01) Net Income $.73 $.58 $2.64 $1.78 (a) Capital Expenditures
$232.9 $478.4 $815.5 $1,170.9 Depreciation $180.5 $163.1 $696.0
$640.2 (a) Included an after-tax charge of $96.5, 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/
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