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News ReleaseAir Products Reports Fiscal Q2 EPS Up 40% Raises 2008 Full Year EPS Guidance

April 23, 2008 Lehigh Valley, Pa.

Air Products (NYSE:APD) today reported net income of $314 million, or diluted earnings per share (EPS) of $1.43, for its fiscal second quarter ended March 31, 2008. Net income increased 38 percent, and diluted EPS increased 40 percent compared with the prior year.

These results include income from discontinued operations of $0.28 per share and a pension settlement charge of $0.08 per share. Excluding these items, net income of $270 million increased 24 percent, and diluted EPS of $1.23 increased 27 percent.

Second quarter revenues of $2,605 million were up 13 percent from the prior year on higher volumes in the Tonnage Gases and Electronics and Performance Materials segments, higher pricing in Merchant Gases, and favorable currency. Excluding the pension settlement charge, operating income of $365 million increased 18 percent versus the prior year.

John McGlade, chairman, president and chief executive officer, said, “We had another strong quarter of double-digit sales and earnings growth. We made good progress on a number of our fiscal 2008 targets, including improving our operating margin and increasing our quarterly dividend by 16 percent. Finally, we completed the sale of our Polymer Emulsions business and announced our first sale of gas orders in the Middle East.”

Second Quarter Segment Performance

  • Merchant Gases sales of $902 million were up 15 percent. Operating income of $167 million increased 18 percent over the prior year on improved pricing and favorable currency impacts, partially offset by higher distribution costs.
  • Tonnage Gases sales of $867 million were up 25 percent on strong volumes and increased natural gas prices. Operating income of $111 million increased 20 percent over the prior year on volume growth from new plants in Asia and Europe and improved plant loading.
  • Electronics and Performance Materials sales of $562 million were up six percent and operating income of $68 million increased 20 percent over the prior year on higher volumes and the impact of restructuring actions in Electronics. Electronics sales were driven by higher specialty materials and tonnage volumes, while Performance Materials volume gains were driven by strong demand in Europe and the Middle East and new product growth in emerging markets.
  • Equipment and Energy sales of $105 million declined 21 percent and operating income of $10 million decreased 39 percent from the prior year, reflecting the expected lower liquefied natural gas heat exchanger activity.
  • Healthcare sales of $170 million were up eight percent and operating income of $9 million increased 34 percent over the prior year, driven by a weaker dollar and volume growth in Europe.


McGlade said, “Despite slowing economic growth, we are positioned to continue double-digit earnings and sales growth while delivering on our commitment to improved margins and returns. This consistent performance is a result of the actions we have taken to shift our business portfolio to higher growth, less cyclical and higher return businesses. We see great opportunities ahead to expand our leading positions in the markets we serve around the world. We will continue to capitalize on our strong business and financial positions to serve our customers, drive for lower costs and productivity, and deliver superior financial results to our investors.”

“With our strong first-half performance, growing backlog of new investments and improving margins driven by our productivity efforts, we are raising our guidance to a range of $4.95 to $5.05 per share, representing 18-20 percent year-on-year earnings growth.”

The company currently anticipates fiscal third quarter EPS from continuing operations in the range of $1.25 to $1.30 per share, or 12 to 16 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. Air Products has annual revenues of $10 billion, operations in over 40 countries, and 22,000 employees around the globe. For more information, visit

 NOTE: This document 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 document regarding important risk factors. Actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors, including, without limitation, overall economic and business conditions different than those currently anticipated; future financial and operating performance of major customers and industries served by the Company; the impact of competitive products and pricing; interruption in ordinary sources of supply of raw materials; the ability to recover unanticipated increased energy and raw material costs from customers; costs and outcomes of litigation or regulatory activities; consequences of acts of war or terrorism impacting the United States’ and other markets; the effects of a pandemic or a natural disaster; the ability to attract, hire and retain qualified personnel in all regions of the world where the company operates; charges related to portfolio management, goodwill recoverability, business restructuring and cost reduction actions; the success of implementing cost reduction programs; the timing, impact, and other uncertainties of future acquisitions or divestitures; unanticipated contract terminations or customer cancellation or postponement of projects or sales; significant fluctuations in interest rates and foreign currencies from that currently anticipated; the continued availability of capital funding sources in all of the company's foreign operations; the impact of new or changed environmental, healthcare, tax or other legislation and regulations in jurisdictions in which the Company and its affiliates operate; the impact of new or changed 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 document 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.

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 GAAP results to non-GAAP measures.

Continuing Operations 

2008 GAAP $338.2 $253.1 $1.15    
2007 GAAP 308.6 216.8 .97    
% Change GAAP 10% 17% 19%    
2008 GAAP $338.2 $253.1 $1.15    
Pension settlement 26.3 16.5 .08    
2008 Non-GAAP Measure $364.5 $269.6 $1.23    
2007 GAAP $308.6 $216.8 $.97 $1.24 $4.50
Gain on contract settlement         (.11)
Global cost reduction plan         .04
Pension settlement         .03
Donation/sale of cost investment         (.09)
Tax audit settlements/adjustments       (.12) (.17)
2007 Non-GAAP Measure $308.6 $216.8 $.97 $1.12 $4.20
% Change Non-GAAP Measure 18% 24% 27%    
2008 Forecast GAAP         $4.86-$4.96
Pension settlement         .09
2008 Forecast Non-GAAP         $4.95-$5.05
2008 Forecast GAAP       $1.25-$1.30 $4.86-4.96
2007 GAAP       $1.24 $4.50
% Change GAAP       1%-5% 8%-10%
2008 Forecast Non-GAAP       $1.25-$1.30 $4.95-$5.05
2007 Non-GAAP       $1.12 $4.20
% Change Non-GAAP       12%-16% 18%-20%

View entire earnings release with all financial tables. (323 KB)

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Contact Information

  • Press Contact
    Katie McDonald
    Air Products and Chemicals, Inc.
    7201 Hamilton Boulevard
    Allentown, PA 18195-1501
    (610) 481-6642
  • Investor Contact
    Simon Moore
    (610) 481-7461
    Air Products and Chemicals, Inc.
    7201 Hamilton Boulevard
    Allentown, PA 18195-1501
    (610) 481-2729
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