April 25, 2007 Lehigh Valley, Pa.
Air Products (NYSE:APD) today reported net income of $228 million, or diluted earnings per share (EPS) of $1.02, for its second fiscal quarter ended March 31, 2007. On a continuing operations basis, net income increased 16 percent and diluted EPS was up 19 percent compared with the prior year.
Record second quarter revenue of $2,473 million was up 11 percent from the prior year on strong volumes across the company. Operating income of $325 million was up 15 percent versus the prior year.
John Jones, chairman and chief executive officer, said, "This was another excellent quarter, capping off a great first half to our fiscal year. We again delivered strong volume performance, with our Merchant Gases, Tonnage Gases, and Electronics and Performance Materials businesses leading the way, and we drove productivity to our bottom line. Most importantly, we again made a meaningful improvement in our return on capital versus last year. We also announced a strategic acquisition in Poland to build our resources and capabilities in a high growth region."
Individual Business Segment Performance
Air Products' fiscal 2007 second quarter results for its six segments were:
Merchant Gases sales of $785 million were up 17 percent and operating income of $141 million increased 23 percent over the prior year on strong volumes across most end-use industries and in all regions, and improved pricing.
Tonnage Gases sales of $607 million were up 14 percent and operating income of $81 million increased four percent over the prior year, driven by volume growth from new refinery hydrogen plants and higher loading, partially offset by higher plant turnaround and maintenance costs related to customer outages.
Electronics and Performance Materials sales of $551 million were up 17 percent and operating income of $58 million increased 23 percent over the prior year on higher volumes. Electronics sales were driven by significantly higher equipment sales and tonnage revenue from new investments, while Performance Materials sales increased due to an acquisition and improved volumes in Asia and Europe.
Equipment and Energy sales of $132 million were down 25 percent and operating income of $16 million was down 18 percent compared to the prior year, reflecting the expected slowing of activity. The company received one new liquefied natural gas heat exchanger order during the quarter.
Healthcare sales of $157 million were up 15 percent driven by contract wins in Europe. Operating income of $7 million was up from the prior year on strength in Europe, particularly the U.K. and Spain.
Chemicals sales of $243 million were down two percent and operating income of $23 million was down eight percent, primarily due to the prior year divestiture of a polyurethane intermediates plant.
Looking forward, Jones said, "We expect a strong finish to fiscal 2007, driven by continued volume growth in manufacturing and energy markets, along with our continued focus on productivity and margin expansion. We are raising our EPS guidance to a range of $4.12 to $4.20 per share, representing 18 to 20 percent* year-on-year earnings growth."
The company currently anticipates fiscal third quarter EPS in the range of $1.03 to $1.07 per share, or 14 to 19 percent year-on-year earnings growth.
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 baseline performance. Presented below is a reconciliation of reported results to non-GAAP measures.
||YTD Diluted EPS-Continuing Operations|
|% Change GAAP
|Global Cost Reduction Plan
|FY06 Non-GAAP Measure
|FY06 Non-GAAP Measure
|% Change Non-GAAP
View entire earnings release with all financial tables. (61 KB)