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Air Products (APD) Tops Earnings and Sales Estimates in Q2

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Air Products and Chemicals, Inc. (APD - Free Report) logged earnings from continuing operations of $2.38 per share in second-quarter fiscal 2022 (ended Mar 31, 2022), up 12% from $2.13 recorded in the year-ago quarter. Earnings per share (EPS) topped the Zacks Consensus Estimate of $2.35.

In the quarter under review, the industrial gases giant delivered revenues of $2,945.1 million, up around 17.7% year over year. The figure beat the Zacks Consensus Estimate of $2,939 million. The upside can be attributed to higher pricing and volumes as well as increased energy cost pass-through.

Segment Highlights

Revenues in the Americas segment were up 12% year over year to $1,187 million. The upside was driven by higher pricing and energy cost pass-through as well as increased volumes driven primarily by hydrogen recovery and higher merchant demand.

Revenues in the Europe segment surged 32% year over year to $739 million. Higher volumes led by merchant demand drove results in the segment. The segment also witnessed higher pricing and energy pass-through.

Revenues in the Asia segment rose 8% year over year to $751 million. The upside can be attributed to increased energy pass-through, higher volumes and higher pricing.

Equity affiliates' income in the Middle East & India segment increased to $71 million from $55 million in the prior-year quarter, mainly from the Jazan joint venture.

Financials

Air Products ended the fiscal second quarter with cash and cash equivalents of around $2,348.7 million, down from the previous-year quarter’s figure of $5.8 billion. The long-term debt was down 5% year over year to $6,462.2 million.

Outlook

Air Products expects a full-year fiscal 2022 adjusted EPS of $10.20-$10.40, indicating 13-15% growth from the prior-year’s adjusted EPS. For the third quarter of fiscal 2022, the company expects EPS in the range of $2.55-$2.65, suggesting a rise of 10-15% from third-quarter fiscal 2021 adjusted EPS.

Air Products expects capital expenditures of $4.5-$5 billion for full-year fiscal 2022.

Price Performance

The company’s shares have declined 15.7% in the past year compared with a 4.2% fall of the industry.

Zacks Investment Research
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Zacks Rank & Key Picks

Air Products currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .

Nutrien has a projected earnings growth rate of 127.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 31.1% upward in the past 60 days.

Nutrien’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, while missing once. It delivered a trailing four-quarter earnings surprise of roughly 5.9%, on average. NTR has rallied around 80.2% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AdvanSix has a projected earnings growth rate of 63.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 39.4% upward in the past 60 days.

AdvanSix’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 23.6%. ASIX has surged 53% in a year. The company carries a Zacks Rank #1.

Allegheny, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 707.7% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 6.1% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 17.3% over a year.


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