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Air Products Acquires Shell's Coal Gasification Technology
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Air Products and Chemicals Inc. (APD - Free Report) has successfully acquired the Coal Gasification Technology licensing business from Shell Global Solutions International B.V., a unit of Royal Dutch Shell plc. Financial terms of the deal, which was initially announced in January, remains undisclosed. Both the companies have also formed a strategic alliance to offer liquids gasification to refineries.
Gasification technologies offer a lower-emission way to turn coal into syngas which in turn is provided to customers to make higher-value products. Through this deal, Air Products will be able to expand its offering of synthesis gas, or syngas, for existing and future projects.
Shell’s gasification technology is already operating at nearly 200 gasification systems. With this acquisition, Air Products has gained access to Shell's associated patent portfolios for solids (coal and biomass) gasification as well as sharing of patent rights for residue and biomass gasification. The buyout also provides the company an opportunity to fully explore outsourcing options to produce and supply syngas for customers planning to use gasification.
This deal will further support previously announced projects by Air Products such as Lu'An in Changzhi, Shanxi Province, China, which the company has successfully closed as well as for future projects.
Air Products’ shares have moved up 12.6% over a year, outperforming the industry’s 9.6% gain.
The company logged adjusted earnings of $1.71 per share for second-quarter fiscal 2018, up 20% from the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.68
Air Products posted fiscal second-quarter revenues of $2,155.7 million, up around 9% year over year. Sales, however, missed the Zacks Consensus Estimate of $2,190 million.
Air Products raised its earnings outlook for fiscal 2018 factoring in the expected contribution from the Lu'An syngas project. The company now expects its adjusted earnings to be in the range of $7.25 to $7.40 per share (a 15-17% increase from the prior year), up from its earlier view of $7.15-$7.35 per share.
Moreover, the company expects adjusted earnings to be in the band of $1.80 to $1.85 per share for the fiscal third quarter, up 9-12% year over year. It also sees capital expenditure of $1.8-$2 billion for fiscal 2018.
Air Products and Chemicals, Inc. Price and Consensus
FMC Corporation has an expected long-term earnings growth rate of 11.3%. Its shares have gained around 18% over a year.
Huntsman has an expected long-term earnings growth rate of 8.3%. Its shares have moved up around 14.5% over a year.
Kronos has an expected long-term earnings growth rate of 5%. Its shares have gained around 29% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>
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Air Products Acquires Shell's Coal Gasification Technology
Air Products and Chemicals Inc. (APD - Free Report) has successfully acquired the Coal Gasification Technology licensing business from Shell Global Solutions International B.V., a unit of Royal Dutch Shell plc. Financial terms of the deal, which was initially announced in January, remains undisclosed. Both the companies have also formed a strategic alliance to offer liquids gasification to refineries.
Gasification technologies offer a lower-emission way to turn coal into syngas which in turn is provided to customers to make higher-value products. Through this deal, Air Products will be able to expand its offering of synthesis gas, or syngas, for existing and future projects.
Shell’s gasification technology is already operating at nearly 200 gasification systems. With this acquisition, Air Products has gained access to Shell's associated patent portfolios for solids (coal and biomass) gasification as well as sharing of patent rights for residue and biomass gasification. The buyout also provides the company an opportunity to fully explore outsourcing options to produce and supply syngas for customers planning to use gasification.
This deal will further support previously announced projects by Air Products such as Lu'An in Changzhi, Shanxi Province, China, which the company has successfully closed as well as for future projects.
Air Products’ shares have moved up 12.6% over a year, outperforming the industry’s 9.6% gain.
The company logged adjusted earnings of $1.71 per share for second-quarter fiscal 2018, up 20% from the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.68
Air Products posted fiscal second-quarter revenues of $2,155.7 million, up around 9% year over year. Sales, however, missed the Zacks Consensus Estimate of $2,190 million.
Air Products raised its earnings outlook for fiscal 2018 factoring in the expected contribution from the Lu'An syngas project. The company now expects its adjusted earnings to be in the range of $7.25 to $7.40 per share (a 15-17% increase from the prior year), up from its earlier view of $7.15-$7.35 per share.
Moreover, the company expects adjusted earnings to be in the band of $1.80 to $1.85 per share for the fiscal third quarter, up 9-12% year over year. It also sees capital expenditure of $1.8-$2 billion for fiscal 2018.
Air Products and Chemicals, Inc. Price and Consensus
Air Products and Chemicals, Inc. Price and Consensus | Air Products and Chemicals, Inc. Quote
Zacks Rank & Stocks to Consider
Air Products currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials space worth considering are FMC Corporation (FMC - Free Report) , Huntsman Corporation (HUN - Free Report) and Kronos Worldwide Inc. (KRO - Free Report) . All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FMC Corporation has an expected long-term earnings growth rate of 11.3%. Its shares have gained around 18% over a year.
Huntsman has an expected long-term earnings growth rate of 8.3%. Its shares have moved up around 14.5% over a year.
Kronos has an expected long-term earnings growth rate of 5%. Its shares have gained around 29% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>