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Air Products' (APD) Q3 Earnings Top Estimates, Revenues Miss

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Air Products and Chemicals, Inc. (APD - Free Report) logged third-quarter fiscal 2023 (ended Jun 30, 2023) earnings from continuing operations of $2.67 per share, up from $2.62 recorded in the year-ago quarter.

Barring one-time items, earnings per share were $2.98. It beat the Zacks Consensus Estimate of $2.91.

The industrial gases giant generated revenues of $3,033.9 million, down around 5% from $3,189.3 million year over year. The figure missed the Zacks Consensus Estimate of $3,269.1 million. Higher prices and volumes were more than offset by lower energy cost pass-through and unfavorable currency swings.

Segment Highlights

Revenues in the Americas segment were down 11% year over year to $1,260.7 million. The figure was lower than our estimate of $1,299.6 million. Sales declined as higher volumes and pricing were more than offset by lower energy costs.

Revenues in the Europe segment declined 4.5% year over year to $706.6 million. It was lower than our estimate of $798.8 million. Higher pricing, favorable currency and higher volumes were more than offset by lower energy cost.

Revenues in the Asia segment rose 9.5% year over year to $822.9 million. It was higher than our estimate of $757 million. The upside was due to higher volumes, pricing and energy costs that more than offset unfavorable currency.

Financials

Air Products ended the fiscal third quarter with cash and cash equivalents of around $1,637.7 million, down about 44.6% year over year. Long-term debt was up 33.4% year over year to $8,466.5 million.

Outlook

Air Products expects full-year fiscal 2023 adjusted EPS of $11.40-$11.50, indicating 11-12% growth from the prior year’s adjusted EPS. For the fourth quarter of fiscal 2023, the company expects adjusted EPS in the range of $3.04-$3.14, suggesting a rise of 7-10% from fourth-quarter fiscal 2022 adjusted EPS.

Air Products expects capital expenditures in the range of $5 billion to $5.5 billion for full-year fiscal 2023.

Price Performance

The company’s shares have surged 21.8% in the past year compared with a 12% rise of the industry.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Air Products currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include PPG Industries Inc. (PPG - Free Report) , ATI Inc. (ATI - Free Report) and Carpenter Technology Corporation (CRS - Free Report) .

PPG, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 20.8% for the current fiscal year. The Zacks Consensus Estimate for PPG's earnings for the current fiscal year has been revised 1.6% upward in the past 60 days. It delivered an earnings surprise of 7.3% each of the trailing four quarters, on average. PPG has gained around 10.5% over a year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ATI, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 13.1% for the current year. Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares are up around 77.8% in a year.

CRS, currently carrying a Zacks Rank #1, has a projected earnings growth rate of 198.11% for the current year. Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 30.9%, on average. CRS shares are up around 76.6% in a year.

 

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