PX In Line with Zacks Consensus

Praxair, Inc. (PX - Analyst Report) reported better-than-expected results for the fourth quarter and fiscal 2009.
 
Net earnings stood at $340 million or $1.09 per share, and $1,254 million or $4.01 during the fourth quarter and full year 2009, respectively. This was much higher than the EPS of 64 cents and $3.80 reported in the same period of 2008. The increase was due to lower operating expenses of 9.3% and 17.2%, respectively. Reported earnings met the Zacks Consensus Estimate of $1.09 and $4.01 for the fourth quarter and full year 2009, respectively.
 
During the fourth quarter, sales were almost flat year over year. Sales amounted to $2,407 million, compared to $2,403 million in the year ago quarter. Excluding foreign currency and cost pass-through effects, sales were 4% below the prior-year quarter due to lower volumes. Full-year sales were $8,956 million, down 17% year over year due to lower volumes and negative foreign currency and cost pass-through effects, partially offset by higher pricing.
 
During full year 2009, cash flow from operations was a record $2,168 million, 6% higher than the prior year. Capital expenditures were $1,352 million, down from $1,611 million in 2008. Praxair paid $491 million in dividends and repurchased $141 million of stock, net of issuances. Cash flow also funded acquisitions of $131 million and a modest decrease in debt. During 2009, net debt decreased by $62 million.
 
Praxair declared a quarterly dividend of 45 cents per share, a 13% increase from 40 cents per share in the previous quarter. The dividend is payable on March 15, 2010 to shareholders of record on March 5, 2010.
 
This is the 17th consecutive annual dividend increase for Praxair, which reflects its confidence to maintain a high quality of business throughout the economic cycles.
 
Praxair is expecting modest growth in the emerging economies of Brazil, China and India based on its existing project backlog and the current levels of new projects and business development. Currently, the project backlog stands at 40 large projects with a record capital value of over $2 billion.
 
For the first quarter and full year 2010, Praxair expects adjusted EPS in the range of $1.05 to $1.10 and $4.43 to $4.63, respectively. For the full year of 2010, sales are expected to be $10 billion.
 
Praxair’s intense focus on continuously expanding its reach in its operating regions and adding new customers to its existing spheres of business have accelerated its profit growth, which should continue in future. Furthermore, Praxair is likely to benefit from the favorable economic environment, given its broad end-market exposure to food and beverage, steel, glass, and chemicals.

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