Back to top

Analyst Blog

Zacks Equity Research

Praxair Q3 Earnings Rise but Lags Est.


 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at or call 800-767-3771 ext.  9339.

Industrial gas producer and supplier, Praxair Inc. (PX - Analyst Report) reported adjusted earnings per share of $1.51 for the third quarter of 2013, up 8.6% year over year and one cent below the Zacks Consensus Estimate of $1.52.

The adjusted earnings result for the quarter excludes $0.02 per share of pension settlement related charge. Including this, GAAP earnings per share in the quarter were $1.49.

Revenue: Praxair’s total sales in the third quarter increased 8.6% year over year to $3,013 million. Results were below the Zacks Consensus Estimate of $3,021 million. The revenue increase can be attributed to 5% contribution from volume growth, 2% from favorable prices and 3% contributions from acquisitions. These were partially offset by 1% negative impact from foreign currency translation risks.

Backlog at the end of the third quarter 2013 was roughly $2 billion.
In the quarter, revenues generated from North America were up 14.2% year over year while that from Europe increased 9.7%. Revenue from South America decreased 4.3% and Asia went up 7.5%. Surface Technologies revenue was at $160 million in the quarter, up 1.9% from the year-ago quarter.

Margins: Cost of sales in the quarter increased 6.4% year over year and represented 56.3% of the total revenue. Adjusted operating profit for Praxair in the quarter was $679 million, up 9% year over year while adjusted margin stood at 22.5%.
Balance Sheet: Exiting the third quarter 2013, Praxair had cash and cash equivalent balance of $134 million, up 31.4% from $102 million reported in the previous quarter. Long-term debt balance increased 0.25% sequentially to $7,883 million.

Cash Flow: Praxair generated net cash of $904 million from operating activities in the third quarter, up from $746 million in the year-ago quarter. Capital spending went down 5.7% to $516 million, with a major portion being invested for a new production plant setting.

Share Repurchases/Dividends: Praxair pursues a consistent strategy of returning cash to shareholders through dividend payments and share repurchases. During the third quarter 2013, the company paid $176 million in dividends and repurchased shares worth $113 million.

Alongside the quarterly results, Board of Directors of Praxair declared a quarterly dividend of 60 cents to be paid on Dec 16, 2013 to its shareholders of record as on Dec 6, 2013.

Outlook: For the fourth quarter of 2013, management projects earnings per share to be within the $1.52-$1.57 per share range.

For 2013, adjusted earnings per share are expected to be within $5.90-$5.95 range as against $5.90-$6.00 range expected earlier while GAAP earnings are expected to be within $5.80-$5.85 versus prior expectation of $5.82-$5.92. The revised guidance includes the impact of Praxair’s cautious approach towards volume growth in the fourth quarter.

Sales are expected to be roughly $12 billion for the full year. Capital spending is expected to be $1.9 billion and adjusted effective tax rate guidance is projected to be 28%.

Praxair Inc. is the largest industrial gas producer and supplier in the Americas and one of the leading gas producing companies worldwide. The stock currently carries a Zacks Rank #2 (Buy).

Other stocks to watch out for in the industry are E. I. du Pont de Nemours and Company (DD - Analyst Report), PPG Industries Inc. (PPG - Analyst Report) and Air Products & Chemicals Inc. (APD - Analyst Report), each carrying a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%