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News ReleaseAir Products Reports Fiscal 2010 Third Quarter Earnings

July 22, 2010 Lehigh Valley, Pa.


  • Sales increased 14% versus prior year, underlying sales up 12%
  • Operating margin improved to 16.6%*
  • Earnings per share of $1.28, up 22%*
  • Fiscal 2010 EPS guidance of $4.94 to $5.00*
  • Recent project awards strengthen backlog

Air Products (NYSE:APD) today reported net income of $277 million, or diluted earnings per share (EPS) of $1.28, for its fiscal third quarter ended June 30, 2010. This result excludes an after-tax charge of $24 million, or $0.11 per share, for costs associated with the tender offer for the outstanding shares of Airgas, Inc.

The discussion of third quarter results and guidance in this release is based on non-GAAP comparisons. A reconciliation can be found at the end of this release.*

Third quarter revenues of $2,252 million increased 14 percent from the prior year, and operating income of $374 million rose 22 percent from the prior year on significantly improved volumes.

John McGlade, chairman, president and chief executive officer, said, "Our Tonnage, Merchant, and Electronics and Performance Materials businesses had significant increases in volume this quarter. Our continued improvements in margin, earnings growth and return on capital show that we remain focused on delivering the value our shareholders expect.”

Third Quarter Segment Performance

  • Merchant Gases sales of $915 million increased 4 percent versus prior year on improved volumes across all regions. Operating income of $176 million improved 5 percent versus prior year on better volumes. Volumes were particularly strong in Asia and are improving in both the US and Europe liquid bulk businesses.
  • Tonnage Gases sales of $725 million were up 28 percent from the prior year, principally due to new projects coming onstream and improved volumes from existing steel and chemicals customers. Higher energy and raw material cost pass-through also contributed. Operating income of $120 million increased 37 percent on higher volumes.
  • Electronics and Performance Materials sales of $497 million improved 21 percent, and operating income of $62 million increased 60 percent over the prior year mainly on higher volumes, which have recovered to pre-recession levels. Electronics sales increased 18 percent versus prior year and 11 percent sequentially on improved volumes driven by higher customer utilization. The recent restructuring efforts in Electronics have been completed. Performance Materials volumes grew 26 percent versus prior year and improved 10 percent sequentially on strength in the underlying business supported by new product sales.
  • Equipment and Energy sales of $116 million were down slightly versus the prior year. Operating income of $21 million increased from the prior year on higher LNG activity.


McGlade said, "As the global economy recovers, we are well positioned to serve our broad customer base. As seen by the recent announcements from our Tonnage and Electronics businesses, we continue to win new business and our project backlog remains strong. Successes in applications development have generated substantial new business signings in our Merchant segment. Our operating leverage across the company will continue to drive margin improvement. We expect earnings growth to exceed 20 percent for fiscal 2010 and are on track to hit our margin goal of 17 percent in 2011.”

Air Products now expects fourth quarter EPS from continuing operations to be between $1.27 and $1.33 per share and full-year EPS from continuing operations to be between $4.94 and $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  

NOTE: The information above contains "forward-looking statements,” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including earnings guidance for the fourth quarter and full year. These forward-looking statements are based on management's reasonable expectations and assumptions as of the date of this press release. 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, stalling of the global economic recovery; renewed deterioration in economic and business conditions; weakening demand for the Company's products, future financial and operating performance of major customers and industries served by the Company; unanticipated contract terminations or customer cancellations or postponement of projects and sales; asset impairments due to economic conditions or specific product or customer events; 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 epidemic or a natural disaster; charges related to current 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; 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 and other risk factors described in the Company's Form 10-K 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.

Consolidated Results
    Continuing Operations  
Millions of dollars Q3
2010 GAAP $336.4   $1.17    
2009 GAAP 143.8   .54    
% Change GAAP 134%   117%    
2010 GAAP $336.4 $253.2 $1.17    
Acquisition-related costs (tax impact $14.2) (a) 37.9 23.7 .11    
2010 Non-GAAP Measure $374.3 $276.9 $1.28    
2009 GAAP $143.8 $114.6 $.54   $3.00
Global cost reduction plan (Q3 tax impact $39.8) (b) 124.0 84.2 .39   .94
Customer bankruptcy and asset actions (Q3 tax impact $11.1) (c) 32.1 21.0 .10   .10
Pension settlement (Q3 tax impact $3.0) (a) 8.0 5.0 .02   .02
2009 Non-GAAP Measure $307.9 $224.8 $1.05   $4.06
% Change Non-GAAP Measure 22% 23% 22%    
2010 Guidance (d)       $1.27-$1.33 $4.94-$5.00
2009 GAAP         $3.00
% Change         65%-67%
% Change Non-GAAP Measure         22%-23%
Operating Income
2010 GAAP     $2,252.3 $336.4 14.9%
2010 Non-GAAP Measure     2,252.3 374.3 16.6%
  1. Based on statutory tax rate of 37.4%
  2. Based on average statutory tax rate of 32.1%
  3. Based on average statutory tax rate of 34.6%
  4. Guidance excludes the impact of acquisition-related costs

View entire earnings release with all financial tables. (63 KB)

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  • Press Contact
    Renee Giello
    (610) 481-4876
    Air Products and Chemicals, Inc.
    7201 Hamilton Boulevard
    Allentown, PA 18195-1501
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    Simon Moore
    (610) 481-7461
    Air Products and Chemicals, Inc.
    7201 Hamilton Boulevard
    Allentown, PA 18195-1501
    (610) 481-2729
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