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Air Products to Buy Europe's Leading Carbon Dioxide Business

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Air Products and Chemicals Inc. (APD - Free Report) inked a definitive agreement to acquire ACP Europe SA — is the biggest independent carbon dioxide business in Continental Europe. The deal is subjected to customary closing conditions and financial terms remain undisclosed.

Air Products’ broad portfolio of industrial gases, including liquid carbon dioxide from its operations in Spain and Poland is supplied across 13 European countries.

This buyout will enable the company to serve existing customers better in Europe and tap new industrial gas growth opportunities. Also, the move will help Air Products to foray into newer regions of Europe as a liquid carbon dioxide supplier.

Air Products’ shares have moved up 15.6% in a year, underperforming the industry’s 18.2% gain.

 


 

In first-quarter fiscal 2018, the company reported adjusted earnings of $1.79 per share, up 22% from the year-ago quarter. The bottom line also surpassed the Zacks Consensus Estimate of $1.66. Meanwhile, revenues were $2,216.6 million, up around 18% year over year. The top line outpaced the Zacks Consensus Estimate of $2,159.2 million.

For fiscal 2018, the company anticipates adjusted earnings in the range of $7.15-$7.35 per share, up 13-16% from the prior year. The guidance includes an expected benefit of 20-25 cents per share from the U.S. Tax Cuts and Jobs Act. For the fiscal second quarter, Air Products expects the same in the band of $1.65 to $1.70 per share. Also, it projects capital expenditure of $1.2-$1.4 billion for the current year.

Air Products has built a strong project backlog. These projects are anticipated to be accretive to earnings and cash flow over the next few years. In addition, strategic investments in high-return projects, new business deals and acquisitions are expected to drive results in fiscal 2018. The company also remains on track with delivering on cost-reduction programs, which is likely to support margins.



Air Products and Chemicals, Inc. Price and Consensus

 

 

Zacks Rank & Other Stocks to Consider

Air Products currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Methanex Corporation (MEOH - Free Report) , LyondellBasell Industries N.V. (LYB - Free Report) and Cabot Corporation (CBT - Free Report) .

Methanex has an expected long-term earnings growth rate of 15% and sports a Zacks Rank #1 (Strong Buy). Its shares have rallied 13.2% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

LyondellBasell has an expected long-term earnings growth rate of 9% and flaunts a Zacks Rank #1. The company’s shares have gained 18.4% in a year.

Cabot has an expected long-term earnings growth rate of 10% and carries a Zacks Rank #2. Its shares have moved up 11.1% over a year.

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