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News ReleaseAir Products Reports Very Strong Fiscal 2018 First Quarter Results

January 26, 2018 Lehigh Valley, Pa.

Q1 FY18 (all from continuing operations):

  • GAAP EPS of $.70, down 39 percent from the prior year; GAAP net income of $156 million 
  • Adjusted EPS of $1.79*, up 22 percent versus prior year; up 18 percent excluding a $.06 benefit from new U.S. Tax Cuts and Jobs Act 
  • Adjusted EBITDA margin of 33.2 percent*



  • Fiscal 2018 adjusted EPS guidance of $7.15 to $7.35 per share, up 13 to 16 percent over prior year, including an estimated $0.20 to $0.25 benefit from the US Tax Cuts and Jobs Act. Fiscal 2018 second quarter adjusted EPS guidance of $1.65 to $1.70 per share, up 15 to 19 percent over the fiscal 2017 second quarter, including an estimated $0.05 benefit from the US Tax Cuts and Jobs Act. This guidance excludes the Lu'An project and any other significant future acquisitions.

*The results and guidance in this release, including in the highlights above, include references to non-GAAP continuing operations measures. These exclude discontinued operations and are identified by the word “adjusted” preceding the measure. A reconciliation of GAAP to non-GAAP results can be found below.

Air Products (NYSE: APD) today reported GAAP net income from continuing operations of $156 million and GAAP diluted earnings per share (EPS) from continuing operations of $.70, down 38 and 39 percent, respectively from the prior year, for its fiscal first quarter ended December 31, 2017. These results included a net $239 million, or $1.09 per share, charge related to the U.S. Tax Cuts and Jobs Act ("Tax Act").

For the quarter, on a non-GAAP basis, adjusted net income from continuing operations of $395 million increased 23 percent and diluted adjusted EPS from continuing operations of $1.79 increased 22 percent over prior year. Excluding a $.06 benefit from the new Tax Act, EPS increased 18 percent.

The adjusted EPS benefit from the Tax Act in the first quarter was $.06 per share. Air Products expects the full-year adjusted EPS benefit of the Tax Act to be $0.20 to $0.25 per share, with an expected adjusted full-year tax rate of 20 to 21 percent. Non-GAAP results for the Company in the fiscal first quarter of 2018 exclude a net expense of $239 million due to the Tax Act, which includes an expense of $453 million for the cost of the deemed repatriation tax and adjustments to the future cost of repatriation from foreign investments, and a benefit of $214 million, primarily from the re-measurement of the Company's net U.S. deferred tax liabilities at the lower corporate tax rate. See reconciliation of non-GAAP measures starting on page 4.

First quarter sales of $2.2 billion increased 18 percent from the prior year on 13 percent higher volumes, two percent higher pricing and three percent favorable currency. Volumes were higher in all three Industrial Gas regions, driven by new plants, a contract termination resulting in a plant sale in China, and base business growth.

For the quarter, adjusted EBITDA of $735 million increased 12 percent over the prior year, driven by the higher volumes and Asia pricing. Adjusted EBITDA margin of 33.2 percent decreased 160 basis points from the prior year, primarily driven by the China contract termination/plant sale and higher energy pass-through.

Commenting on the results, Seifi Ghasemi, chairman, president and chief executive officer, said, “The committed and motivated team at Air Products delivered another excellent quarter of safety and financial results. Adjusted EPS of $1.79 was another quarterly record. This is also the 15th consecutive quarter that we have reported adjusted EPS growth. In addition, we are winning new projects and delivering on our growth strategy. We generated a significant amount of investable cash and announced a 16 percent increase to our quarterly dividend, making our annual dividend $4.40 per share.”

Air Products Q1FY18 Earnings Release – Tables
Reconciliation of Non-GAAP Measures, Consolidated Income Statements, Consolidated Balance Sheets, Consolidated Statements of Cash Flows, Summary by Business Segments, Notes to Consolidated Financial Statements
Download PDF (751 KB)

First Quarter Results by Business Segment 

  • Industrial Gases – Americas sales of $910 million increased five percent over prior year, driven by higher volumes, primarily strong hydrogen demand. Adjusted EBITDA of $354 million increased one percent over the prior year, with higher volumes more than offsetting costs from higher planned maintenance outages. Adjusted EBITDA margin of 38.9 percent decreased 160 basis points from the prior year. 

  • Industrial Gases – EMEA sales of $516 million increased 29 percent over prior year, driven by 17 percent higher volumes, as well as nine percent favorable currency and three percent favorable energy pass through. The higher volumes were primarily from a new hydrogen plant in India; merchant volumes were also positive. Adjusted EBITDA of $167 million increased 18 percent over the prior year, primarily driven by the volume increase and the positive currency impact. Adjusted EBITDA margin of 32.3 percent decreased 320 basis points from the prior year; excluding the impact of higher energy pass through and high natural gas prices in India, margins were roughly flat. 

  • Industrial Gases – Asia sales of $644 million increased 47 percent over prior year, mainly due to the contract termination/plant sale in China; excluding this, volumes were up eight percent from both new plants and strong base merchant business. Pricing increased seven percent over prior year, driven by China merchant pricing. Adjusted EBITDA of $247 million increased 38 percent from the contract termination and plant sale, strong volumes, higher pricing and favorable currency. Excluding the contract termination/plant sale, adjusted EBITDA margins increased 240 basis points. 


Ghasemi said, “We continue to be optimistic about the future of Air Products. We cannot predict, and do not have control, over worldwide political or economic developments. But we do have control over the operational and growth performance of Air Products, and we feel confident we can deliver on our goals. We have a strong balance sheet – the best in the industry. We will continue to focus on safety, controlling our costs, and investing in the many strategic growth opportunities we see.”

Air Products expects fiscal 2018 adjusted EPS of $7.15 to $7.35 per share, up 13 to 16 percent over prior year, including an estimated $0.20 to $0.25 benefit from the Tax Act. For the fiscal 2018 second quarter, Air Products expects adjusted EPS of $1.65 to $1.70 per share, up 15 to 19 percent over the fiscal 2017 second quarter, including an estimated $0.05 benefit from the Tax Act. This guidance excludes the Lu'An project and any other significant future acquisitions.

The capital expenditure forecast for fiscal year 2018 is expected to be in the range of $1.2 to $1.4 billion on a GAAP and non-GAAP basis. This guidance excludes Lu'An and any other significant future acquisitions.

The Company adopted accounting guidance in the first quarter which revised the reporting of pension and postretirement expense to reclassify non-service costs from operating costs to non-operating income/expense. There is no impact to reported EPS. See Note 2 to the consolidated financial statements for more details.

Management has provided adjusted EPS and adjusted tax rate guidance on a continuing operations basis. While Air Products might have additional impacts from the Tax Act or incur additional costs for items such as cost reduction actions and pension settlements in future periods, it is not possible, without unreasonable efforts, to identify the amount or significance of these events or the potential for other transactions that may impact future GAAP EPS or the effective tax rate. Management does not believe these items to be representative of underlying business performance. Accordingly, management is unable to reconcile, without unreasonable effort, the Company’s forecasted range of adjusted EPS or the impact of the adjusted tax rate to a comparable GAAP range.

Earnings Teleconference
Access the Q1 earnings teleconference scheduled for 10:00 a.m. Eastern Time on January 26 by calling (323) 994-2083 and entering passcode 9546225, or access the Event Details page on Air Products’ Investor Relations web site.

About Air Products
Air Products (NYSE:APD) is a world-leading Industrial Gases company in operation for over 75 years. The Company’s core industrial gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, and food and beverage. Air Products is also the world’s leading supplier of liquefied natural gas process technology and equipment.

The Company had fiscal 2017 sales of $8.2 billion from continuing operations in 50 countries and has a current market capitalization of about $35 billion. Approximately 15,000 passionate, talented and committed employees from a diversity of backgrounds are driven by Air Products’ higher purpose to create innovative solutions that benefit the environment, enhance sustainability and address the challenges facing customers, communities, and the world. For more information, visit

NOTE: This release contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about earnings guidance, business outlook and investment opportunities. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date this release is furnished. 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, global or regional economic conditions and supply and demand dynamics in market segments into which the Company sells; political risks, including the risks of unanticipated government actions; acts of war or terrorism; significant fluctuations in interest rates and foreign currencies from that currently anticipated; future financial and operating performance of major customers; unanticipated contract terminations or customer cancellations or postponement of projects and sales; our ability to execute the projects in our backlog; asset impairments due to economic conditions or specific events; the impact of price fluctuations in natural gas and disruptions in markets and the economy due to oil price volatility; costs and outcomes of litigation or regulatory investigations; the success of productivity and operational improvement programs; the timing, impact, and other uncertainties of future acquisitions or divestitures, including reputational impacts; the Company’s ability to implement and operate with new technologies; the impact of changes in environmental, tax or other legislation, economic sanctions and regulatory activities in jurisdictions in which the Company and its affiliates operate; and other risk factors described in the Company’s Form 10-K for its fiscal year ended September 30, 2017. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this release 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.

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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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