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Why Is Air Products and Chemicals (APD) Down 5.6% Since its Last Earnings Report?
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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 5.6% in the past month, underperforming the market.
Will the recent negative trend continue leading up to its next earnings release, or is APD 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 catalysts.
Air Products’ Q1 Earnings & Revenues Top Estimates
Air Products beat earnings expectations in first-quarter fiscal 2018 (ended Dec 31, 2017). The company logged fiscal first quarter adjusted earnings of $1.79 per share, up 22% from the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.66.
Net income (as reported) from continuing operations, for the reported quarter, was down 38% year over year to $156 million or 70 cents per share. The results include a $239 million (or $1.09 per share) charge associated with the U.S. Tax Cuts and Jobs Act.
Cost of sales rose roughly 19.4% year over year to around $1.6 billion. Selling and administrative expenses increased 16.3% year over year to $191.6 million.
Air Products posted fiscal first quarter revenues of $2,216.6 million, up around 18% year over year. The top line also beat the Zacks Consensus Estimate of $2,159.2 million. A 13% increase in volumes, 2% rise in price and 3% favorable currency impact contributed to revenue growth.
Segmental Highlights
Revenues from the Industrial Gases — America segment grew 5% year over year to $910 million in the fiscal first quarter, supported by higher volumes along with strong hydrogen demand.
Sales from the Industrial Gases — EMEA segment rose 29% year over year to $516 million due to 17% higher volumes, 9% favorable currency and 3% favorable energy pass through.
Sales from the Industrial Gases — Asia segment increased 47% year over year to $644 million on the back of an 8% increase in volumes and a 7% rise in price.
Financial Position
Air Products ended first-quarter fiscal 2018 with cash and cash equivalents of $2,722.6 million, reflecting a 3.1% rise year over year. Total long-term debt decreased around 3.8% year over year to $3,414.9 million.
Outlook
For fiscal 2018, Air Products anticipates adjusted earnings in the range of $7.15-$7.35 per share (up from prior view of $6.85-$7.05), 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. The company expects adjusted earnings in the band of $1.65-$1.70 per share for the fiscal second quarter. It also sees capital expenditure of $1.2-$1.4 billion for fiscal 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to one lower. While looking back an additional 30 days, we can see even more upward momentum. There has been only one move up in the last two months.
Air Products and Chemicals, Inc. Price and Consensus
At this time, APD has a subpar Growth Score of D, however its momentum is doing a bit better with a C. Charting the exact same path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable for momentum and value investors based on our style scores.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. It comes with little surprise APD has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Air Products and Chemicals (APD) Down 5.6% Since its Last Earnings Report?
A month has gone by since the last earnings report for Air Products and Chemicals, Inc. (APD - Free Report) . Shares have lost about 5.6% in the past month, underperforming the market.
Will the recent negative trend continue leading up to its next earnings release, or is APD 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 catalysts.
Air Products’ Q1 Earnings & Revenues Top Estimates
Air Products beat earnings expectations in first-quarter fiscal 2018 (ended Dec 31, 2017). The company logged fiscal first quarter adjusted earnings of $1.79 per share, up 22% from the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.66.
Net income (as reported) from continuing operations, for the reported quarter, was down 38% year over year to $156 million or 70 cents per share. The results include a $239 million (or $1.09 per share) charge associated with the U.S. Tax Cuts and Jobs Act.
Cost of sales rose roughly 19.4% year over year to around $1.6 billion. Selling and administrative expenses increased 16.3% year over year to $191.6 million.
Air Products posted fiscal first quarter revenues of $2,216.6 million, up around 18% year over year. The top line also beat the Zacks Consensus Estimate of $2,159.2 million. A 13% increase in volumes, 2% rise in price and 3% favorable currency impact contributed to revenue growth.
Segmental Highlights
Revenues from the Industrial Gases — America segment grew 5% year over year to $910 million in the fiscal first quarter, supported by higher volumes along with strong hydrogen demand.
Sales from the Industrial Gases — EMEA segment rose 29% year over year to $516 million due to 17% higher volumes, 9% favorable currency and 3% favorable energy pass through.
Sales from the Industrial Gases — Asia segment increased 47% year over year to $644 million on the back of an 8% increase in volumes and a 7% rise in price.
Financial Position
Air Products ended first-quarter fiscal 2018 with cash and cash equivalents of $2,722.6 million, reflecting a 3.1% rise year over year. Total long-term debt decreased around 3.8% year over year to $3,414.9 million.
Outlook
For fiscal 2018, Air Products anticipates adjusted earnings in the range of $7.15-$7.35 per share (up from prior view of $6.85-$7.05), 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. The company expects adjusted earnings in the band of $1.65-$1.70 per share for the fiscal second quarter. It also sees capital expenditure of $1.2-$1.4 billion for fiscal 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to one lower. While looking back an additional 30 days, we can see even more upward momentum. There has been only one move up in the last two months.
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, APD has a subpar Growth Score of D, however its momentum is doing a bit better with a C. Charting the exact same path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable for momentum and value investors based on our style scores.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. It comes with little surprise APD has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.