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News ReleaseAir Products Reports Fiscal 2010 Second Quarter Earnings

April 22, 2010 Lehigh Valley, Pa.


  • Sales increased 15% versus prior year, up 3% sequentially
  • Operating margin improved to 16.2%*
  • Earnings per share of $1.23, up 38%*
  • Raising full-year guidance to $4.90 to $5.00, representing 21% to 23% EPS growth*

Air Products (NYSE:APD) today reported net income of $267 million, or diluted earnings per share (EPS) of $1.23, for its fiscal second quarter ended March 31, 2010. This result excludes an after-tax charge of $15 million, or $0.07 per share, for costs associated with the tender offer for the outstanding shares of Airgas, Inc.

The discussion of second quarter results and guidance in this release is based on non-GAAP comparisons excluding costs associated with the Airgas offer. A reconciliation can be found at the end of this release.*

Second quarter revenues of $2,249 million grew 15 percent primarily on improved volumes in Tonnage Gases, and Electronics and Performance Materials. Energy and raw material cost pass-through and favorable currency also contributed to the increase in sales. Underlying sales grew nine percent. Operating income of $364 million rose 40 percent from the prior year due to higher volumes and lower costs.

John McGlade, chairman, president and chief executive officer, said, "We are seeing improvement across our businesses. Our second quarter had strong underlying revenue growth, continued margin improvement and significant earnings growth. We are delivering on our commitments."

Second Quarter Segment Performance

  • Merchant Gases sales of $922 million increased six percent versus the prior year on favorable currency. Operating income of $178 million rose 14 percent from the prior year on higher volumes and lower costs.
  • Tonnage Gases sales of $757 million increased 21 percent on improved volumes from new plant onstreams and existing steel and chemical customers, favorable currency and higher raw material cost pass-through. Operating income of $107 million rose nine percent from the prior year on higher volumes and new plant onstreams.
  • Electronics and Performance Materials sales of $451 million increased 36 percent driven by improved volumes. Operating income of $57 million was up significantly on higher volumes and lower costs.
  • Equipment and Energy sales of $119 million were down seven percent on declining ASU orders. Operating income of $18 million increased 12 percent from the prior year on higher LNG activity.


McGlade said, "I’m particularly pleased with the performance of the Air Products team over the past year. Looking to the second half of our fiscal year, we are forecasting earnings growth in excess of 20 percent for 2010. The gradual economic recovery, combined with the leverage from our existing capacity, new project onstreams and improving productivity should position us well to meet our margin target of 17 percent in fiscal 2011. I want to assure our shareholders we will stay focused on our goals as we pursue the strategic opportunities in front of us."

Air Products now expects third quarter EPS from continuing operations to be between $1.25 and $1.29 per share and full-year EPS from continuing operations of $4.90 to $5.00 per share.

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. In fiscal 2009, Air Products had revenues of $8.3 billion, operations in over 40 countries, and 18,900 employees around the globe. For more information, visit

On February 11, 2010, Air Products Distribution, Inc., a wholly owned subsidiary of Air Products and Chemicals, Inc. ("Air Products"), commenced a cash tender offer for all the outstanding shares of common stock of Airgas, Inc. ("Airgas") not already owned by Air Products, subject to the terms and conditions set forth in the Offer to Purchase dated as of February 11, 2010 (the "Offer to Purchase"). The purchase price to be paid upon the successful closing of the cash tender offer is $60.00 per share in cash, without interest and less any required withholding tax, subject to the terms and conditions set forth in the Offer to Purchase, as amended. The offer is scheduled to expire at midnight, New York City time, on Friday, June 4, 2010, unless further extended in the manner set forth in the Offer to Purchase.

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. The tender offer is being made pursuant to a tender offer statement on Schedule TO (including the Offer to Purchase, a related letter of transmittal and other offer materials) filed by Air Products with the U.S. Securities and Exchange Commission ("SEC") on February 11, 2010. INVESTORS AND SECURITY HOLDERS OF AIRGAS ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders can obtain free copies of these documents and other documents filed with the SEC by Air Products through the web site maintained by the SEC at The Offer to Purchase and related materials may also be obtained for free by contacting the Information Agent for the tender offer, MacKenzie Partners, Inc., at 212-929-5500 or toll-free at 800-322-2885.

In connection with the proposed transaction, Air Products may file a proxy statement with the SEC. Any definitive proxy statement will be mailed to stockholders of Airgas. INVESTORS AND SECURITY HOLDERS OF AIRGAS ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by Air Products through the web site maintained by the SEC at

Air Products and certain of its respective directors and executive officers may be deemed to be participants in the proposed transaction under the rules of the SEC. Security holders may obtain information regarding the names, affiliations and interests of Air Products' directors and executive officers in Air Products' Annual Report on Form 10-K for the year ended September 30, 2009, which was filed with the SEC on November 25, 2009, and its proxy statement for the 2010 Annual Meeting, which was filed with the SEC on December 10, 2009. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will also be included in any proxy statement and other relevant materials to be filed with the SEC when they become available.

NOTE: This release contains "forward-looking statements" within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including earnings guidance. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date this presentation is made 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 not anticipated by management, including, without limitation, a slowdown in the global economic recovery; renewed deterioration in economic and business conditions; poor demand for the Company's products; future financial and operating performance of major customers and industries served by the Company; inability to collect receivables from or recovery of payments made by customers in bankruptcy proceedings; unanticipated contract terminations or customer cancellations or postponement of projects and sales; asset impairments due to economic conditions or specific product or customer events; unexpected costs associated with the Company’s cash tender offer for Airgas, Inc.; costs of future restructuring actions which are not currently planned or anticipated; 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; charges related to current portfolio management and cost reduction actions; the success of implementing cost reduction programs; inability to achieve anticipated acquisition synergies; the timing, impact, and other uncertainties of future acquisitions or divestitures; 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 guidance; the timing and rate at which tax credits can be utilized and other risk factors described in the Company’s Form 10K for its fiscal year ended September 30, 2009. 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 are reconciliations of reported GAAP results to non-GAAP measures.

Consolidated Results
      Continuing Operations
Millions of Dollars Q2
2010 GAAP $340.6   $1.16    
2009 GAAP 260.4   .89    
% Change GAAP 31%   30%    
2010 GAAP $340.6 $252.0 $1.16    
Acquisition-related costs (tax impact $8.8) (a) 23.4 14.6 .07    
2010 Non-GAAP Measure $364.0 $266.6 $1.23    
% Change Non-GAAP Measure 40%   38%    
2010 Guidance (b)       $1.25-$1.29 $4.90-$5.00
2009 GAAP         $3.00
% Change         63%-67%
2009 GAAP         $3.00
Global cost reduction plan         .94
Customer bankruptcy and asset actions         .10
Pension settlement         .02
2009 Non-GAAP Measure         $4.06
% Change Non-GAAP Measure         21%-23%
2010 GAAP         $2,249.0 $340.6 15.1%
2010 Non-GAAP Measure     2,249.0 364.0 16.2%
  1. Based on statutory tax rate of 37.4%
  2. Guidance excludes the impact of acquisition-related costs

View entire earnings release with all financial tables (70 KB)

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  • Press Contact
    Renee Giello
    (610) 481-4876
    Air Products and Chemicals, Inc.
    7201 Hamilton Boulevard
    Allentown, PA 18195-1501
  • 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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