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Air Products (APD) Down 5.3% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Air Products and Chemicals, Inc. (APD - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Air Products' Q1 Earnings, Sales Trail Estimates
Air Products missed earnings expectations in first-quarter fiscal 2017 (ended Dec 31, 2016).
The company logged first-quarter adjusted earnings of $1.47 per share, up 9% from the year-ago quarter. However, earnings missed the Zacks Consensus Estimate of $1.48. Adjusted earnings exclude one-time items including charges associated with business separation.
Net income from continuing operations, as reported, was down 10% year over year to $252 million or $1.15 per share. Cost of sales for the reported quarter rose roughly 1.8% year over year to around $1.3 billion. However, selling and administrative expenses decreased 4.6% year over year to $165.7 million.
Revenues inched up 1% year over year to $1.88 billion in the reported quarter but missed the Zacks Consensus Estimate of $1.96 billion. A 2% increase in volumes and 2% favorable energy pass-through more than offset the currency headwinds of 3% in the quarter.
Segmental Highlights
Revenues from the Industrial Gases – America segment grew 3% year over year to $864 million in the reported quarter, supported by a 5% rise in energy pass-through, partly offset by 2% lower volumes in Latin America. Pricing and currency were relatively flat year over year.
Sales from the Industrial Gases – Europe, Middle East, and Africa (“EMEA”) segment fell 9% year over year to $400 million due to lower volumes adversely affecting sales by 2%, unfavorable currency impact of 6% and lower energy pass-through reducing sales by 1%. Pricing remained relatively flat year over year.
Sales from the Industrial Gases – Asia segment improved 6% year over year to $438 million on the back of a 10% increase in volumes. Unfavorable currency translation hurt sales by 3% and pricing by 1%.
Financial Position
Air Products ended the first quarter of fiscal 2017 with cash and cash equivalents of $655.5 million, up roughly 134.9% year over year. Total long-term debt fell around 15% year over year to $3,289 million. Operating cash flow for first quarter of fiscal 2017 increased 0.2% year over year to $574.3 million.
Business Developments
Air Products successfully completed the spin-off of its Electronic Materials Division as Versum Materials on Oct 1, 2016. In the first quarter of 2017, the company incurred separation costs of $0.12 per share.
Outlook
For the second quarter of fiscal 2017, Air Products expects adjusted earnings from continuing operations of $1.30 to $1.40 per share. Air Products expects adjusted earnings for fiscal 2017 to be in the range of $6.00 to $6.25 per share, up 9% year over year at the midpoint.
The company expects capital expenditures of roughly $1 billion in fiscal 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions
Air Products and Chemicals, Inc. Price and Consensus
At this time, Air Products' stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'F'. Following the similar course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.
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Air Products (APD) Down 5.3% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Air Products and Chemicals, Inc. (APD - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Air Products' Q1 Earnings, Sales Trail Estimates
Air Products missed earnings expectations in first-quarter fiscal 2017 (ended Dec 31, 2016).
The company logged first-quarter adjusted earnings of $1.47 per share, up 9% from the year-ago quarter. However, earnings missed the Zacks Consensus Estimate of $1.48. Adjusted earnings exclude one-time items including charges associated with business separation.
Net income from continuing operations, as reported, was down 10% year over year to $252 million or $1.15 per share. Cost of sales for the reported quarter rose roughly 1.8% year over year to around $1.3 billion. However, selling and administrative expenses decreased 4.6% year over year to $165.7 million.
Revenues inched up 1% year over year to $1.88 billion in the reported quarter but missed the Zacks Consensus Estimate of $1.96 billion. A 2% increase in volumes and 2% favorable energy pass-through more than offset the currency headwinds of 3% in the quarter.
Segmental Highlights
Revenues from the Industrial Gases – America segment grew 3% year over year to $864 million in the reported quarter, supported by a 5% rise in energy pass-through, partly offset by 2% lower volumes in Latin America. Pricing and currency were relatively flat year over year.
Sales from the Industrial Gases – Europe, Middle East, and Africa (“EMEA”) segment fell 9% year over year to $400 million due to lower volumes adversely affecting sales by 2%, unfavorable currency impact of 6% and lower energy pass-through reducing sales by 1%. Pricing remained relatively flat year over year.
Sales from the Industrial Gases – Asia segment improved 6% year over year to $438 million on the back of a 10% increase in volumes. Unfavorable currency translation hurt sales by 3% and pricing by 1%.
Financial Position
Air Products ended the first quarter of fiscal 2017 with cash and cash equivalents of $655.5 million, up roughly 134.9% year over year. Total long-term debt fell around 15% year over year to $3,289 million. Operating cash flow for first quarter of fiscal 2017 increased 0.2% year over year to $574.3 million.
Business Developments
Air Products successfully completed the spin-off of its Electronic Materials Division as Versum Materials on Oct 1, 2016. In the first quarter of 2017, the company incurred separation costs of $0.12 per share.
Outlook
For the second quarter of fiscal 2017, Air Products expects adjusted earnings from continuing operations of $1.30 to $1.40 per share. Air Products expects adjusted earnings for fiscal 2017 to be in the range of $6.00 to $6.25 per share, up 9% year over year at the midpoint.
The company expects capital expenditures of roughly $1 billion in fiscal 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions
Air Products and Chemicals, Inc. Price and Consensus
Air Products and Chemicals, Inc. Price and Consensus | Air Products and Chemicals, Inc. Quote
VGM Scores
At this time, Air Products' stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'F'. Following the similar course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.