January 24, 2007 Lehigh Valley, Pa.
Air Products (NYSE:APD) today reported net income of $230 million, or diluted earnings per share (EPS) of $1.03, for its fiscal first quarter ended December 31, 2006. Net income increased 27 percent and diluted EPS was up 29 percent compared with the prior year.
Record first quarter revenues of $2,433 million were up 21 percent from the prior year on strong volume growth in the company's Merchant Gases, Tonnage Gases, Electronics and Performance Materials, and Equipment and Energy segments. Record operating income of $332 million was up 31 percent versus prior year.
John Jones, chairman and chief executive officer, said, "This was an outstanding quarter. We delivered substantial top-line growth through strong volumes, improved pricing and higher equipment results. We also drove productivity to the bottom line, resulting in significantly expanded margins and increased return on capital. Our continued strong performance in the quarter demonstrates our people's focus on becoming a higher growth and higher return company."
Individual Business Segment Performance
Air Products manages its operations, assesses performance and reports results in six global business segments. For the fiscal 2007 first quarter:
Merchant Gases sales of $740 million were up 19 percent and operating income of $139 million increased 32 percent over the prior year on strong volumes, reflecting the company's success in utilizing applications technology to drive growth.
Tonnage Gases sales of $605 million were up 13 percent and operating income of $89 million increased 20 percent over the prior year, driven by higher plant loading and volume growth from six new refinery hydrogen investments, which have increased the company's global hydrogen capacity by 35 percent.
Electronics and Performance Materials sales of $510 million were up 22 percent and operating income of $51 million increased 32 percent over the prior year on higher volumes.
Equipment and Energy sales of $196 million more than doubled and operating income of $27 million increased 85 percent over the prior year, reflecting strong liquefied natural gas heat exchanger backlog and growth in large air separation plant orders.
Healthcare sales of $156 million were up 15 percent over the prior year, driven by recent contract wins in Europe. Operating income of $9 million was down 48 percent from the prior year. Approximately half of the decline was due to a land sale in the prior year. Sequentially, the U.S. business saw improvement on increased sales volumes.
Chemicals sales of $227 million were up five percent and operating income of $19 million increased significantly over the prior year, primarily due to improved volumes.
Looking forward, Jones said, "We're off to a great start and are on our way to having another year of strong performance in fiscal 2007. Our leading market positions, along with our productivity-focused infrastructure investments, position us to deliver continued growth. We are therefore increasing our EPS guidance to a range of $3.98 to $4.10 per share, representing 14 to 17 percent* year-on-year earnings growth."
The company currently anticipates fiscal second quarter EPS in the range of $.98 to $1.03 per share.
Annual Meeting of Shareholders
Air Products will host its Annual Meeting of Shareholders on Thursday, January 25, 2007 at 2:00 p.m. EST. Access the audio Webcast at:
www.airproducts.com/Invest/shareholdersvcs/annualmeeting_materials.htm. Air Products (NYSE:APD) serves customers in industrial, energy, technology and healthcare markets worldwide with a unique portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services. Founded in 1940, Air Products has built leading positions in key growth markets such as semiconductor materials, refinery hydrogen, home healthcare services, natural gas liquefaction, and advanced coatings and adhesives. The company is recognized for its innovative culture, operational excellence and commitment to safety and the environment and is listed in the Dow Jones Sustainability and FTSE4Good Indices. The company has annual revenues of $9 billion, operations in over 40 countries, and over 20,000 employees around the globe. For more information, visit www.airproducts.com.
NOTE: This release contains "forward-looking statements" within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's reasonable expectations and assumptions as of the date of this presentation regarding important risk factors. Actual performance and financial results may differ materially from those expressed in the forward-looking statements because of many factors, including those specifically referenced as future events or outcomes that the company anticipates as well as, among other things, overall economic and business conditions different than those currently anticipated and demand for Air Products' goods and services during that time; competitive factors in the industries in which it competes; interruption in ordinary sources of supply; the ability to recover unanticipated increased energy and raw material costs from customers; uninsured litigation judgments or settlements; changes in government regulations; consequences of acts of war or terrorism impacting the United States' and other markets; the effects of a pandemic or epidemic or a natural disaster; charges related to portfolio management and cost reduction actions; the success of implementing cost reduction programs and achieving anticipated acquisition synergies; the timing, impact and other uncertainties of future acquisitions or divestitures or unanticipated contract terminations; significant fluctuations in interest rates and foreign currencies from that currently anticipated; the impact of tax and other legislation and regulations in jurisdictions in which Air Products and its affiliates operate; the impact of new financial accounting standards; and the timing and rate at which tax credits can be utilized. The company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this presentation to reflect any change in the company's assumptions, beliefs or expectations or any change in events, conditions or circumstances upon which any such forward-looking statements are based.
*This press release contains non-GAAP measures which adjust prior year results to exclude the impact of the 2006 global cost reduction plan. The presentation of non-GAAP measures is intended to enhance the usefulness of financial information by providing measures which the company's management uses internally to evaluate the company's q1fy07-earnings-24jan2007 baseline performance. Presented below is a reconciliation of reported results to non-GAAP measures.
||YTD Diluted |
|% Change GAAP
|Global Cost Reduction Plan
|FY06 Non-GAAP Measure
|FY06 Non-GAAP Measure
|% Change Non-GAAP
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