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Air Products' (APD) Q2 Earnings Top, Raises FY18 Outlook
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Air Products and Chemicals, Inc. (APD - Free Report) topped earnings expectations in second-quarter fiscal 2018 (ended Mar 31, 2018). The industrial gases giant logged fiscal second-quarter adjusted earnings of $1.71 per share, up 20% from the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.68.
Net income (as reported) from continuing operations, for the reported quarter, was up 37% year over year to $416 million or $1.89 per share. The results include an income tax benefit of 18 cents.
Air Products posted fiscal second-quarter revenues of $2,155.7 million, up around 9% year over year, driven by 4% higher volumes and 5% favorable currency impact. Sales, however, missed the Zacks Consensus Estimate of $2,190 million.
Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise
Revenues from the Industrial Gases — America segment went up 3% year over year to $913 million in the quarter, supported by increased hydrogen and merchant gases volumes.
Sales from the Industrial Gases — Europe, Middle East, and Africa (EMEA) segment climbed 36% year over year to $562 million due to higher volumes as well as favorable currency and pricing.
Sales from the Industrial Gases — Asia segment increased 28% year over year to $558 million on the back of higher volumes and pricing and favorable currency swings.
Financial Position
Air Products ended fiscal second-quarter with cash and cash equivalents of $3,066.9 million, reflecting a 64% rise year over year. Total long-term debt rose around 4.7% year over year to $3,454 million.
Outlook
Air Products raised its earnings outlook for fiscal 2018 factoring in the expected contribution from the Lu'An syngas project. The company now expects its adjusted earnings to be in the range of $7.25 to $7.40 per share (a 15-17% increase from the prior year), up from its earlier view of $7.15-$7.35 per share. The company expects to close the $1.3 billion Lu'An syngas supply joint venture in the fiscal third quarter.
Moreover, the company expects adjusted earnings to be in the band of $1.80 to $1.85 per share for the fiscal third quarter, up 9-12% year over year. It also sees capital expenditure of $1.8-$2 billion for fiscal 2018.
Price Performance
Air Products’ shares have moved up 16.9% over a year, outperforming the industry’s 6.1% gain.
Zacks Rank & Stocks to Consider
Air Products currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the basic materials space are Kronos Worldwide Inc. (KRO - Free Report) , Celanese Corporation (CE - Free Report) and Methanex Corporation (MEOH - Free Report) .
Kronos has an expected long-term earnings growth rate of 5% and flaunts a Zacks Rank #1 (Strong Buy). The company’s shares have moved up around 35% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Celanese has an expected long-term earnings growth rate of 8.9% and flaunts a Zacks Rank #1. Its shares have gained roughly 24% over a year.
Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2 (Buy). Its shares have roughly 42% over a year.
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It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Air Products' (APD) Q2 Earnings Top, Raises FY18 Outlook
Air Products and Chemicals, Inc. (APD - Free Report) topped earnings expectations in second-quarter fiscal 2018 (ended Mar 31, 2018). The industrial gases giant logged fiscal second-quarter adjusted earnings of $1.71 per share, up 20% from the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.68.
Net income (as reported) from continuing operations, for the reported quarter, was up 37% year over year to $416 million or $1.89 per share. The results include an income tax benefit of 18 cents.
Air Products posted fiscal second-quarter revenues of $2,155.7 million, up around 9% year over year, driven by 4% higher volumes and 5% favorable currency impact. Sales, however, missed the Zacks Consensus Estimate of $2,190 million.
Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise
Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise | Air Products and Chemicals, Inc. Quote
Segmental Highlights
Revenues from the Industrial Gases — America segment went up 3% year over year to $913 million in the quarter, supported by increased hydrogen and merchant gases volumes.
Sales from the Industrial Gases — Europe, Middle East, and Africa (EMEA) segment climbed 36% year over year to $562 million due to higher volumes as well as favorable currency and pricing.
Sales from the Industrial Gases — Asia segment increased 28% year over year to $558 million on the back of higher volumes and pricing and favorable currency swings.
Financial Position
Air Products ended fiscal second-quarter with cash and cash equivalents of $3,066.9 million, reflecting a 64% rise year over year. Total long-term debt rose around 4.7% year over year to $3,454 million.
Outlook
Air Products raised its earnings outlook for fiscal 2018 factoring in the expected contribution from the Lu'An syngas project. The company now expects its adjusted earnings to be in the range of $7.25 to $7.40 per share (a 15-17% increase from the prior year), up from its earlier view of $7.15-$7.35 per share. The company expects to close the $1.3 billion Lu'An syngas supply joint venture in the fiscal third quarter.
Moreover, the company expects adjusted earnings to be in the band of $1.80 to $1.85 per share for the fiscal third quarter, up 9-12% year over year. It also sees capital expenditure of $1.8-$2 billion for fiscal 2018.
Price Performance
Air Products’ shares have moved up 16.9% over a year, outperforming the industry’s 6.1% gain.
Zacks Rank & Stocks to Consider
Air Products currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the basic materials space are Kronos Worldwide Inc. (KRO - Free Report) , Celanese Corporation (CE - Free Report) and Methanex Corporation (MEOH - Free Report) .
Kronos has an expected long-term earnings growth rate of 5% and flaunts a Zacks Rank #1 (Strong Buy). The company’s shares have moved up around 35% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Celanese has an expected long-term earnings growth rate of 8.9% and flaunts a Zacks Rank #1. Its shares have gained roughly 24% over a year.
Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2 (Buy). Its shares have roughly 42% over a year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>