Air Products and Chemicals Inc. (APD - Analyst Report) announced that it has signed a contract with Jinxin Glass in Jiyuan, located in Henan Province in China, to supply its integrated oxy-fuel solution. The supply of integrated fuel oxygen to Jinxin will help in reducing emissions in its glass melting process by substituting it with the conventional air-fuel combustion. Therefore, with this agreement, Jinxin will be able to adhere to the local government's emissions regulations.
Jinxin uses coal oven gas for manufacturing pharmaceutical borosilicate glass. Tying up with Air Products will enable Jinxin to cater to the strict environmental regulations while improving the productivity and quality of its glass production.
The integrated oxy-fuel solution includes the supply of Cleanfire HRi oxy-fuel burners and a PRISM vacuum swing adsorption (VSA) oxygen generator, which will supply reliable and economical oxygen. Air Products will not only enter Henan in Central China but will also cater to the needs of the glass industry in China. The company has also signed contracts with other borosilicate and fiberglass manufacturers in the southern and eastern parts of China to supply integrated oxy-fuel solutions.
In July 2012, Air Products released its results for fiscal third-quarter 2012 ended June 30, 2012. The company reported adjusted (excluding one-time items) earnings from continued operations of $1.41 a share for the quarter, which was in line with the Zacks Consensus Estimate.
Consolidated net income, as reported, surged 48% year over year to $484.5 million or $2.26 a share compared with $326.5 million or $1.50 a year ago. The increase in profit was attributable to lower costs and one-time gains, which more than offset the impact of lower sales.
Revenues dipped 5% year over year to $2,340.1 million, missing the Zacks Consensus Estimate of $2,455 million. Challenging conditions in Europe and Asia as well as unfavorable currency (stemming from a stronger dollar) weighed on the company’s top line in the quarter.
Air Products’ healthy project backlog and solid bidding activity strongly positions it to achieve its long-term growth target. Given its leading position in the gases business, the company is well positioned to capitalize on the cyclical recovery in its core industrial end markets. Further, new business deals are expected to boost profits in 2012. However, soaring energy and raw material costs pose a threat to margin expansion.
Air Products, which competes with Praxair Inc. (PX - Analyst Report), has a short-term Zacks #3 Rank (Hold) currently and we have a long-term Neutral recommendation on its shares.