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| Lehigh Valley, PA

Air Products Reports Fiscal 2020 First Quarter GAAP EPS# of $2.14, Up 36 Percent, and Adjusted EPS* of $2.14, Up 15 Percent

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Q1 FY20 (comparisons versus prior year):

Q1 FY20 Highlights


#Earnings per share is from continuing operations and attributable to Air Products.

*The identified results and guidance in this release, including in the highlights above, include references to non-GAAP financial measures on both a consolidated and a segment basis. Additional information regarding these measures and a reconciliation of GAAP to non-GAAP historical results can be found below. In addition, as discussed below, it is not possible, without unreasonable efforts, to identify the timing or occurrence of events and transactions that could significantly impact future GAAP EPS or cash flow used for investing activities if they were to occur.

Air Products (NYSE:APD) today reported first quarter fiscal 2020 results, including GAAP diluted EPS from continuing operations of $2.14, up 36 percent; GAAP net income of $489 million, up 37 percent, primarily driven by higher pricing and volumes in all three regions as well as prior year costs related to tax reform adjustments and a facility closure; and GAAP net income margin of 21.7 percent, up 570 basis points, each versus prior year.

For the quarter, on a non-GAAP basis, adjusted diluted EPS from continuing operations of $2.14 was up 15 percent; adjusted EBITDA of $908 million was up 14 percent, primarily driven by higher pricing and volumes in all three regions; and adjusted EBITDA margin of 40.3 percent was up 460 basis points, each versus prior year.

First quarter sales of $2.3 billion increased one percent versus prior year on six percent volume growth and three percent higher pricing, partially offset by five percent lower energy pass-through; one percent unfavorable currency; and two percent from a contract modification to a tolling agreement in India, which impacts sales but not profits. Volume growth was primarily driven by base business growth, new plants, acquisitions and a short-term contract in Asia.

Commenting on the results, Seifi Ghasemi, chairman, president and chief executive officer, said, “I want to thank our talented Air Products team for delivering another set of strong results for the quarter. Our excellent financial position allows us to invest capital strategically, and this quarter we announced our largest-ever U.S. investment to supply Gulf Coast Ammonia in Texas. Meanwhile, we continue to return cash to our shareholders, announcing an 18-cent, or more than 15 percent, dividend increase that marks our 38th consecutive year of dividend increases.”

Fiscal First Quarter Results by Business Segment

(comparisons versus prior year)


Ghasemi said, “The Air Products team remains focused on productivity, creating our own growth opportunities and delivering shareholder value. As we look ahead, we see significant opportunities to provide sustainable solutions for the world to meet its energy and productivity needs, and we are working hard to be at the heart of those opportunities.”

Air Products is maintaining full-year fiscal 2020 adjusted EPS guidance of $9.35 to $9.60 per share, up 14 to 17 percent over prior year. For the fiscal 2020 second quarter, Air Products' adjusted EPS guidance is $2.10 to $2.20 per share, up nine to 15 percent over fiscal 2019 second quarter adjusted EPS.

Air Products continues to expect capital expenditures of approximately $4 billion to $4.5 billion for full-year fiscal 2020.

Management has provided adjusted EPS guidance on a continuing operations basis, which excludes the impact of certain items that we believe are not representative of our underlying business performance, such as the incurrence of additional costs for cost reduction actions and impairment charges, or the recognition of gains or losses on disclosed items. It is not possible, without unreasonable efforts, to predict the timing or occurrence of these events or the potential for other transactions that may impact future GAAP EPS or the effective tax rate. Furthermore, it is not possible to identify the potential significance of these events in advance, but any of these events, if they were to occur, could have a significant effect on our future GAAP EPS. Management therefore is unable to reconcile, without unreasonable effort, the Company’s forecasted range of adjusted EPS and effective tax rate to a comparable GAAP range.

New Accounting Guidance
Effective October 1, 2019, Air Products adopted accounting standards pertaining to leases and hedging activities. In accordance with the new lease guidance, we recorded lease liabilities and right-of-use assets on our consolidated balance sheets for operating leases where we are the lessee. In adopting the new hedging guidance, we presented the impacts of excluded components from our cash flow hedges on intercompany loans in other non-operating income (expense), net. In the prior year, these impacts were included in interest expense. The adoption of these accounting standards did not have a significant impact on the Company’s net income.

Earnings Teleconference
Access the Q1 earnings teleconference scheduled for 10:00 a.m. Eastern Time on January 24, 2020 by calling 323-994-2093 and entering passcode 5494582, or access the Event Details page on Air Products’ Investor Relations web site.

View entire earnings release with all financial tables.

About Air Products


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 expectations and assumptions as of the date of this release and are not guarantees of future performance. While forward-looking statements are made in good faith and based on assumptions, expectations and projections that management believes are reasonable based on currently available information, 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: changes in global or regional economic conditions, supply and demand dynamics in market segments we serve, or in the financial markets; risks associated with having extensive international operations, including political risks, risks associated with unanticipated government actions and risks of investing in developing markets; project delays, contract terminations or customer cancellations or postponement of projects and sales; future financial and operating performance of major customers and joint venture partners; our ability to develop, implement, and operate new technologies, or to execute the projects in our backlog; our ability to develop and operate large scale and technically complex projects, including gasification projects; tariffs, economic sanctions and regulatory activities in jurisdictions in which we and our affiliates and joint ventures operate; the impact of environmental, tax or other legislation, as well as regulations affecting our business and related compliance requirements, including regulations related to global climate change; changes in tax rates and other changes in tax law; the timing, impact and other uncertainties relating to acquisitions and divestitures, including our ability to integrate acquisitions and separate divested businesses, respectively; risks relating to cybersecurity incidents, including risks from the interruption, failure or compromise of our information systems; catastrophic events, such as natural disasters, acts of war, or terrorism; the impact of price fluctuations in oil and natural gas and disruptions in markets and the economy due to oil and natural gas price volatility; costs and outcomes of legal or regulatory proceedings and investigations; asset impairments due to economic conditions or specific events; significant fluctuations in interest rates and foreign currency exchange rates from those currently anticipated; damage to facilities, pipelines or delivery systems, including those we own or operate for third parties; availability and cost of raw materials; the success of productivity and operational improvement programs; and other risk factors described in the Company’s Form 10-K for its fiscal year ended September 30, 2019. Except as required by law, the Company disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in the assumptions, beliefs, or expectations or any change in events, conditions, or circumstances upon which any such forward-looking statements are based.