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The industrial gas giant beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It pulled off a trailing four-quarter earnings surprise of around 0.7%, on average. The company delivered an earnings surprise of around 4.8% in the last reported quarter.
Air Products is expected to have gained from cost-improvement and productivity initiatives in the fiscal third quarter. Higher volumes in the Americas segment and pricing actions are also expected to have aided the company's performance amid headwinds from the sluggishness in Europe and China.
APD’s shares have lost 13% in the past year compared with a 12% decline of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter currently stands at $3,039.8 million, which suggests a rise of roughly 0.2% from the year-ago reported number.
Our estimate for the Americas segment’s revenues is currently pegged at $1,279.6 million, indicating an increase of 1.5% year over year.
The same for the Asia segment’s revenues is pegged at $783.8 million, which suggests a 4.8% year-over-year decline.
Our estimate for the Europe segment’s revenues stands at $697.8 million, indicating a 1.3% year-over-year decline.
Factors at Play
Air Products is expected to have gained from volume gains and higher pricing in the Americas division in the quarter to be reported. Investments in high-return projects, new business deals, acquisitions and productivity measures are also likely to have aided the company’s performance.
The company remains focused on its gasification strategy and is executing its growth projects. These initiatives are likely to have contributed to its earnings and cash flows. APD is realizing the benefits of the completion of the second phase of the Jazan project in Saudi Arabia.
Air Products is also driving productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions. Benefits from additional productivity and cost improvement programs are likely to have supported its margins in the fiscal third quarter.
However, the slowdown in China and Europe might have affected the company’s business in the to-be-reported quarter. The sluggish China economy is impacting volumes in the Industrial Gases - Asia segment. A slower economic recovery in China and the softness in electronics are likely to continue to have affected the segment’s volumes. Air Products is also seeing weak demand for merchant products in Europe. This might have impacted volumes in the Europe segment in the fiscal third quarter.
Air Products and Chemicals, Inc. Price and EPS Surprise
Our proven model does not conclusively predict an earnings beat for APD this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Air Products is -0.64%. This is because the Most Accurate Estimate is pegged at $3.02 while the Zacks Consensus Estimate stands at $3.04. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Air Products currently carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 89 cents.
ATI Inc. (ATI - Free Report) , slated to release earnings on Aug 6, has an Earnings ESP of +3.50% and carries a Zacks Rank #3 at present.
The consensus mark for ATI’s second-quarter earnings is currently pegged at 58 cents.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release second-quarter earnings on Jul 31, has an Earnings ESP of +8.04% and a Zacks Rank #2.
The Zacks Consensus Estimate for Kinross Gold's earnings for the second quarter is currently pegged at 13 cents.
Image: Bigstock
Air Products (APD) to Report Q3 Earnings: What's in the Cards?
Air Products and Chemicals, Inc. (APD - Free Report) is slated to release third-quarter fiscal 2024 results before the opening bell on Aug 1.
The industrial gas giant beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It pulled off a trailing four-quarter earnings surprise of around 0.7%, on average. The company delivered an earnings surprise of around 4.8% in the last reported quarter.
Air Products is expected to have gained from cost-improvement and productivity initiatives in the fiscal third quarter. Higher volumes in the Americas segment and pricing actions are also expected to have aided the company's performance amid headwinds from the sluggishness in Europe and China.
APD’s shares have lost 13% in the past year compared with a 12% decline of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter currently stands at $3,039.8 million, which suggests a rise of roughly 0.2% from the year-ago reported number.
Our estimate for the Americas segment’s revenues is currently pegged at $1,279.6 million, indicating an increase of 1.5% year over year.
The same for the Asia segment’s revenues is pegged at $783.8 million, which suggests a 4.8% year-over-year decline.
Our estimate for the Europe segment’s revenues stands at $697.8 million, indicating a 1.3% year-over-year decline.
Factors at Play
Air Products is expected to have gained from volume gains and higher pricing in the Americas division in the quarter to be reported. Investments in high-return projects, new business deals, acquisitions and productivity measures are also likely to have aided the company’s performance.
The company remains focused on its gasification strategy and is executing its growth projects. These initiatives are likely to have contributed to its earnings and cash flows. APD is realizing the benefits of the completion of the second phase of the Jazan project in Saudi Arabia.
Air Products is also driving productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions. Benefits from additional productivity and cost improvement programs are likely to have supported its margins in the fiscal third quarter.
However, the slowdown in China and Europe might have affected the company’s business in the to-be-reported quarter. The sluggish China economy is impacting volumes in the Industrial Gases - Asia segment. A slower economic recovery in China and the softness in electronics are likely to continue to have affected the segment’s volumes. Air Products is also seeing weak demand for merchant products in Europe. This might have impacted volumes in the Europe segment in the fiscal third quarter.
Air Products and Chemicals, Inc. Price and EPS Surprise
Air Products and Chemicals, Inc. price-eps-surprise | Air Products and Chemicals, Inc. Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for APD this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Air Products is -0.64%. This is because the Most Accurate Estimate is pegged at $3.02 while the Zacks Consensus Estimate stands at $3.04. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Air Products currently carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) , scheduled to release earnings on Jul 31, has an Earnings ESP of +4.86% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 89 cents.
ATI Inc. (ATI - Free Report) , slated to release earnings on Aug 6, has an Earnings ESP of +3.50% and carries a Zacks Rank #3 at present.
The consensus mark for ATI’s second-quarter earnings is currently pegged at 58 cents.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release second-quarter earnings on Jul 31, has an Earnings ESP of +8.04% and a Zacks Rank #2.
The Zacks Consensus Estimate for Kinross Gold's earnings for the second quarter is currently pegged at 13 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.