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Why Is Air Products and Chemicals (APD) Up 9.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for Air Products and Chemicals (APD - Free Report) . Shares have added about 9.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Air Products and Chemicals due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Air Products’ Earnings Beat, Revenues Miss Estimates in Q2
Air Products logged second-quarter fiscal 2024 (ended Mar 31, 2024) earnings from continuing operations of $2.57 per share, up from $1.97 recorded in the year-ago quarter. The bottom line was driven by lower charges for business and asset actions, favorable pricing and lower other costs, which were more than offset by reduced equity affiliates' income, lower volumes and increased interest expense.
Barring one-time items, adjusted earnings per share were $2.85, beating the Zacks Consensus Estimate of $2.72.
The company reported revenues of around $2.93 billion, which was about 8% lower than the same period last year. This figure fell short of the Zacks Consensus Estimate of $3.15 billion. Although prices increased by 1%, the upside was more than offset by a 6% decline in energy cost pass-through, which lowered sales but did not impact net income. Additionally, volumes were down by 2% and unfavorable currency fluctuations accounted for a 1% drop in revenues.
Segment Highlights
Revenues in the Americas segment declined 9% compared with the previous year’s levels, reaching roughly $1.25 billion, which was below our estimate of $1.36 billion. The downside in sales was mainly due to a 12% reduction in energy cost pass-through and a 1% impact from unfavorable currency, partially offset by a 3% increase in pricing and a 1% rise in volumes.
In the Europe segment, revenues fell 11% year over year to $667.9 million, missing our estimate of $691.2 million. The downside was caused by a 6% decline in volumes and a 6% reduction in energy cost pass-through, along with a 1% drop in pricing. These effects were partially offset by a 2% benefit from favorable currency rates.
Revenues in the Asia segment experienced a 4% decline from the previous year’s levels, landing at $779.7 million, which fell short of our estimate of $840.4 million. The downtick was primarily due to a 4% impact from unfavorable currency and a 1% decline in volumes, partially balanced by a 1% increase in energy cost pass-through.
Financials
Air Products ended the quarter with cash and cash items of $2.54 billion, up about 29% sequentially. Total long-term debt was up around 5.3% sequentially to nearly $12.5 billion.
Outlook
Air Products continues to expect fiscal 2024 adjusted earnings per share (EPS) of $12.20-$12.50, indicating 6-9% growth from the prior year’s adjusted EPS. For the third quarter of fiscal 2024, the company expects adjusted EPS in the range of $3-$3.05.
Air Products expects capital expenditures in the range of $5-$5.5 billion for the fiscal 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -8.87% due to these changes.
VGM Scores
At this time, Air Products and Chemicals has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Air Products and Chemicals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Air Products and Chemicals belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, Eastman Chemical (EMN - Free Report) , has gained 3.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Eastman Chemical reported revenues of $2.31 billion in the last reported quarter, representing a year-over-year change of -4.2%. EPS of $1.61 for the same period compares with $1.63 a year ago.
For the current quarter, Eastman Chemical is expected to post earnings of $2.01 per share, indicating a change of +1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Eastman Chemical. Also, the stock has a VGM Score of C.
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Why Is Air Products and Chemicals (APD) Up 9.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Air Products and Chemicals (APD - Free Report) . Shares have added about 9.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Air Products and Chemicals due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Air Products’ Earnings Beat, Revenues Miss Estimates in Q2
Air Products logged second-quarter fiscal 2024 (ended Mar 31, 2024) earnings from continuing operations of $2.57 per share, up from $1.97 recorded in the year-ago quarter. The bottom line was driven by lower charges for business and asset actions, favorable pricing and lower other costs, which were more than offset by reduced equity affiliates' income, lower volumes and increased interest expense.
Barring one-time items, adjusted earnings per share were $2.85, beating the Zacks Consensus Estimate of $2.72.
The company reported revenues of around $2.93 billion, which was about 8% lower than the same period last year. This figure fell short of the Zacks Consensus Estimate of $3.15 billion. Although prices increased by 1%, the upside was more than offset by a 6% decline in energy cost pass-through, which lowered sales but did not impact net income. Additionally, volumes were down by 2% and unfavorable currency fluctuations accounted for a 1% drop in revenues.
Segment Highlights
Revenues in the Americas segment declined 9% compared with the previous year’s levels, reaching roughly $1.25 billion, which was below our estimate of $1.36 billion. The downside in sales was mainly due to a 12% reduction in energy cost pass-through and a 1% impact from unfavorable currency, partially offset by a 3% increase in pricing and a 1% rise in volumes.
In the Europe segment, revenues fell 11% year over year to $667.9 million, missing our estimate of $691.2 million. The downside was caused by a 6% decline in volumes and a 6% reduction in energy cost pass-through, along with a 1% drop in pricing. These effects were partially offset by a 2% benefit from favorable currency rates.
Revenues in the Asia segment experienced a 4% decline from the previous year’s levels, landing at $779.7 million, which fell short of our estimate of $840.4 million. The downtick was primarily due to a 4% impact from unfavorable currency and a 1% decline in volumes, partially balanced by a 1% increase in energy cost pass-through.
Financials
Air Products ended the quarter with cash and cash items of $2.54 billion, up about 29% sequentially. Total long-term debt was up around 5.3% sequentially to nearly $12.5 billion.
Outlook
Air Products continues to expect fiscal 2024 adjusted earnings per share (EPS) of $12.20-$12.50, indicating 6-9% growth from the prior year’s adjusted EPS. For the third quarter of fiscal 2024, the company expects adjusted EPS in the range of $3-$3.05.
Air Products expects capital expenditures in the range of $5-$5.5 billion for the fiscal 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -8.87% due to these changes.
VGM Scores
At this time, Air Products and Chemicals has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Air Products and Chemicals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Air Products and Chemicals belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, Eastman Chemical (EMN - Free Report) , has gained 3.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Eastman Chemical reported revenues of $2.31 billion in the last reported quarter, representing a year-over-year change of -4.2%. EPS of $1.61 for the same period compares with $1.63 a year ago.
For the current quarter, Eastman Chemical is expected to post earnings of $2.01 per share, indicating a change of +1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Eastman Chemical. Also, the stock has a VGM Score of C.