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Air Products' (APD) Earnings Miss, Sales Top Estimates in Q4

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Air Products and Chemicals, Inc. (APD - Free Report) logged earnings from continuing operations of $2.19 per share in fourth-quarter fiscal 2020 (ended Sep 30, 2020), down 3.5% from $2.27 recorded in the year-ago quarter. The bottom line in the reported quarter was hurt by the impact of the coronavirus pandemic. Earnings per share in the reported quarter also missed the Zacks Consensus Estimate of $2.23.

The industrial gases giant delivered fiscal fourth-quarter revenues of $2,320.1 million, up around 2% year over year. The figure beat the Zacks Consensus Estimate of $2,269 million.

Pricing increased 2%, which along with 1% favorable currency, more than offset 1% lower energy pass-through.

FY20 Results

Adjusted earnings for fiscal 2020 rose 2% year over year to $8.38 per share, while net sales dropped 1% to $8.9 billion.

Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise

 

Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise

Air Products and Chemicals, Inc. price-consensus-eps-surprise-chart | Air Products and Chemicals, Inc. Quote

Segment Highlights

Revenues in the Industrial Gases - America segment fell 3% year over year to $912 million due to lower volume, lower energy pass-through and unfavorable currency, which were partly offset by higher pricing.

Revenues in the Industrial Gases - Europe, Middle East, and Africa (EMEA) segment rose 3% year over year to $505 million. Higher pricing and favorable currency more than offset lower energy pass-through and flat volumes.

Revenues in the Industrial Gases - Asia segment dropped 2% year over year to $714 million. The downside was due to lower volumes.

Financials

Air Products ended fiscal 2020 with cash and cash equivalents of $5.3 billion, up 133.6% year over year. Long-term debt was up 145.3% year over year to $7,132.9 million.

Net cash from operating activities was $3,264.7 million for the 12-months ended Sep 30, 2020, up 9.9% year over year.

Outlook

Air Products’ on-site businesses (representing more than half of its sales) continued to deliver stable cash flow amid a challenging COVID-19 environment. The company announced a landmark gasification and hydrogen for mobility megaprojects, which will help address the increasing energy needs globally. It is also committed to boost shareholders’ value. The company increased its dividend for the 38th consecutive year.

Price Performance

The company’s shares have gained 30.8% in the past year compared with the industry’s 2.5% rise.

Zacks Rank & Key Picks

Air Products currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Agnico Eagle Mines Limited (AEM - Free Report) , New Gold Inc. (NGD - Free Report) and Barrick Gold Corporation (GOLD - Free Report) . While Agnico Eagle sports a Zacks Rank #1 (Strong Buy), New Gold and Barrick carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle has an expected earnings growth rate of 103.1% for 2020. Its shares have returned 26.5% in the past year.

New Gold has an expected earnings growth rate of 100% for 2020. The company’s shares have surged 124.9% in the past year.

Barrick has an expected earnings growth rate of 111.8% for 2020. The company’s shares have gained 57.9% in the past year.

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