It has been about a month since the last earnings report for Air Products and Chemicals (
APD Quick Quote APD - Free Report) . Shares have added about 0.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Air Products and Chemicals due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Air Products’ Q2 Earnings & Revenues Surpass Estimates
Air Products recorded second-quarter fiscal 2023 (ending Mar 31, 2023) earnings (from continuing operations) of $1.97 per share, reflecting a fall of 17.2% from the year-ago quarter's $2.38.
The company posted adjusted earnings of $2.74 per share, up 17% from year over year. It beat the Zacks Consensus Estimate of $2.64. Higher pricing and volumes drove the bottom line in the second quarter. However, it was offset by higher costs and adverse currency movements. The company’s net sales in the second quarter were $3,200.1 million, which surpassed the Zacks Consensus Estimate of $3,018.3 million. Net sales increased around 8.7% from $2,945.1 million reported in the prior-year quarter. The top line was driven primarily by higher pricing across the regions and higher volumes, in the reported quarter. Segment Highlights
Revenues in the Americas segment were up 16% year over year to $1,373.1 million. The upside was driven by higher volumes and pricing, partly offset by unfavorable currency swings.
Revenues in the Europe segment rose 2% year over year to $752.9 million. The segment saw higher pricing and benefited from higher volumes, partly offset by unfavorable currency swings and lower energy cost pass-through in the second quarter. Revenues in the Asia segment rose 8% over year to $813.9 million. The segment sales were driven by higher pricing, energy cost pass-through and increased volumes, partly offset by unfavorable currency swings. Equity affiliates' income in the Middle East & India segment increased 39% year over year to $99 million in the reported quarter. Financials
At the end of the second quarter, Air Products had cash and cash equivalents of $2,242.4 million, decreasing around 4.5% year over year. Long-term debt increased approximately 28% year over year to $8,271.9 million.
Air Products expects full-year fiscal 2023 adjusted earnings per share of $11.30-$11.50, indicating a 10-12% year-over-year growth. For the third quarter of fiscal 2023, the company expects adjusted earnings per share in the range of $2.85-$2.95, suggesting a rise of 10-14% from the year-ago quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
Currently, Air Products and Chemicals has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Air Products and Chemicals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Air Products and Chemicals belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, LyondellBasell (
LYB Quick Quote LYB - Free Report) , has gained 1.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
LyondellBasell reported revenues of $10.25 billion in the last reported quarter, representing a year-over-year change of -22.1%. EPS of $2.50 for the same period compares with $4 a year ago.
LyondellBasell is expected to post earnings of $2.51 per share for the current quarter, representing a year-over-year change of -51.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.7%.
LyondellBasell has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.