We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Industrial gas producer and supplier Praxair Inc. (PX - Free Report) reported in-line bottom-line results for fourth-quarter 2016. The company’s adjusted earnings came in at $1.41 per share, same as the Zacks Consensus Estimate. However, the bottom line lagged the year-ago tally of $1.47 by 4.1%.
For 2016, the company’s adjusted earnings came in at $5.48 per share, in line with the Zacks Consensus Estimate but 5.5% below the year-ago tally of $5.80.
In the quarter, Praxair generated revenues of $2.644 billion, up 1.9% year over year but below the Zacks Consensus Estimate of $2.67 billion.
The year-over-year increase in revenues was driven by 1% gain from acquired assets, 1% cost pass-through and 1% impact from favorable pricing. The positives were partially offset by 1% negative impact from unfavorable foreign currency movements.
The company operates through five business segments, with their fourth quarter top-line results briefed below:
On a segmental basis, revenues generated in North America decreased 2% year over year to $1,397 million, while that from Europe grew 9% to $351 million. In Asia, revenues slipped 1% to $395 million. Surface Technologies revenues were $149 million, down from $152 million in the year-ago quarter. Revenues from South America increased 18% to $352 million.
For 2016, the company’s revenues totaled $10.534 billion, in line with the Zacks Consensus Estimate but down 2.2% year over year.
Margins
In the quarter, Praxair’s cost of sales increased 3.6% year over year, representing 55.9% net sales compared with 55% recorded in the year-ago quarter. Gross margin decreased 90 basis points (bps) to 44.1%. Selling, general and administrative expenses decreased 1.1% year over year to $272 million. Research and development expenses were flat at $23 million.
Adjusted operating profit came in at $599 million, down 4% year over year. Adjusted margin was 22.7%.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Praxair had cash and cash equivalents of $524 million, down from $627 million in the preceding quarter. Long-term debt was down 3.3% sequentially to $8,917 million.
In this quarter, Praxair generated net cash of $726 million from its operating activities, down from $791 million in the year-ago quarter. Capital spent on purchase of property, plant and equipment was $409 million, up 5.7% year over year.
During the quarter, Praxair repurchased shares worth $95 million and paid dividends of $214 million.
Concurrent with the earnings release, Praxair announced that its board of directors has approved a 5% increase in its quarterly dividend rate. The new rate now stands at 78.75 cents per share, up from the previous rate of 75 cents.
The revised dividend will be paid on Mar 15, 2017, to shareholders on record as of Mar 7.
Outlook
For 2017, Praxair anticipates earnings to be within $5.45–$5.80 per share. Excluding 3% negative impact of foreign currency headwinds, earnings are predicted to grow 2–9% year over year. Capital spending is expected to be nearly $1.4 billion and tax rate is expected to be 28%.
For the first quarter of 2017, Praxair expects earnings in a range of $1.28 to $1.35 per share. Adverse forex impact is expected to be 1%.
With a market capitalization of $34.1 billion, Praxair currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the chemical diversified industry include BASF SE (BASFY - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Methanex Corporation (MEOH - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BASF SE has a positive average earnings surprise of 34.34% for the last four quarters. Also, earnings expectations for 2017 have improved over the past 60 days.
Kronos Worldwide, Inc.’s financial performance has been impressive in the last quarter, with a positive earnings surprise of 111.11%. Also, the stock’s earnings estimates for 2017 have been revised upward over the last 60 days.
Methanex Corporation has witnessed positive revisions in earnings estimates for 2017 over the past 60 days. Also, the company posted a positive earnings surprise of 42.86% in the last quarter.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Praxair (PX) Posts In-Line Q4 Earnings; Hikes Dividend
Industrial gas producer and supplier Praxair Inc. (PX - Free Report) reported in-line bottom-line results for fourth-quarter 2016. The company’s adjusted earnings came in at $1.41 per share, same as the Zacks Consensus Estimate. However, the bottom line lagged the year-ago tally of $1.47 by 4.1%.
For 2016, the company’s adjusted earnings came in at $5.48 per share, in line with the Zacks Consensus Estimate but 5.5% below the year-ago tally of $5.80.
Revenues
In the quarter, Praxair generated revenues of $2.644 billion, up 1.9% year over year but below the Zacks Consensus Estimate of $2.67 billion.
The year-over-year increase in revenues was driven by 1% gain from acquired assets, 1% cost pass-through and 1% impact from favorable pricing. The positives were partially offset by 1% negative impact from unfavorable foreign currency movements.
The company operates through five business segments, with their fourth quarter top-line results briefed below:
On a segmental basis, revenues generated in North America decreased 2% year over year to $1,397 million, while that from Europe grew 9% to $351 million. In Asia, revenues slipped 1% to $395 million. Surface Technologies revenues were $149 million, down from $152 million in the year-ago quarter. Revenues from South America increased 18% to $352 million.
For 2016, the company’s revenues totaled $10.534 billion, in line with the Zacks Consensus Estimate but down 2.2% year over year.
Margins
In the quarter, Praxair’s cost of sales increased 3.6% year over year, representing 55.9% net sales compared with 55% recorded in the year-ago quarter. Gross margin decreased 90 basis points (bps) to 44.1%. Selling, general and administrative expenses decreased 1.1% year over year to $272 million. Research and development expenses were flat at $23 million.
Adjusted operating profit came in at $599 million, down 4% year over year. Adjusted margin was 22.7%.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Praxair had cash and cash equivalents of $524 million, down from $627 million in the preceding quarter. Long-term debt was down 3.3% sequentially to $8,917 million.
In this quarter, Praxair generated net cash of $726 million from its operating activities, down from $791 million in the year-ago quarter. Capital spent on purchase of property, plant and equipment was $409 million, up 5.7% year over year.
During the quarter, Praxair repurchased shares worth $95 million and paid dividends of $214 million.
Concurrent with the earnings release, Praxair announced that its board of directors has approved a 5% increase in its quarterly dividend rate. The new rate now stands at 78.75 cents per share, up from the previous rate of 75 cents.
The revised dividend will be paid on Mar 15, 2017, to shareholders on record as of Mar 7.
Outlook
For 2017, Praxair anticipates earnings to be within $5.45–$5.80 per share. Excluding 3% negative impact of foreign currency headwinds, earnings are predicted to grow 2–9% year over year. Capital spending is expected to be nearly $1.4 billion and tax rate is expected to be 28%.
For the first quarter of 2017, Praxair expects earnings in a range of $1.28 to $1.35 per share. Adverse forex impact is expected to be 1%.
Praxair, Inc. Price and Consensus
Praxair, Inc. Price and Consensus | Praxair, Inc. Quote
Zacks Rank & Stocks to Consider
With a market capitalization of $34.1 billion, Praxair currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the chemical diversified industry include BASF SE (BASFY - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Methanex Corporation (MEOH - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BASF SE has a positive average earnings surprise of 34.34% for the last four quarters. Also, earnings expectations for 2017 have improved over the past 60 days.
Kronos Worldwide, Inc.’s financial performance has been impressive in the last quarter, with a positive earnings surprise of 111.11%. Also, the stock’s earnings estimates for 2017 have been revised upward over the last 60 days.
Methanex Corporation has witnessed positive revisions in earnings estimates for 2017 over the past 60 days. Also, the company posted a positive earnings surprise of 42.86% in the last quarter.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>