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Air Products and Chemicals (APD) Up 9.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Air Products and Chemicals (APD - Free Report) . Shares have added about 9.9% in that time frame, outperforming 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’ Q1 Earnings Miss as Americas Unit Sales Slump
Air Products logged first-quarter fiscal 2024 (ended Dec 31, 2023) earnings from continuing operations of $2.73 per share, up from $2.57 recorded in the year-ago quarter. The bottom line was driven by higher pricing and volumes as well as increased equity affiliates' income that more than offset higher costs.
Barring one-time items, adjusted earnings per share (EPS) were $2.82. It missed the Zacks Consensus Estimate of $2.99.
The industrial gases giant recorded revenues of roughly $3 billion, down around 6% year over year. The figure missed the Zacks Consensus Estimate of $3.3 billion. Higher prices (up 1%), higher volumes (up 3%) and favorable currency swings of 1% were more than offset by 11% lower energy cost pass-through.
The company faced headwinds from a slowdown in manufacturing in China, lower helium demand, higher costs from a sale of equipment project and the currency devaluation in Argentina.
Segment Highlights
Revenues in the Americas segment were down 10% year over year to $1.25 billion. The figure was below our estimate of $1.49 billion. Sales declined as higher volumes and pricing were more than offset by lower energy cost pass-through.
Revenues in the Europe segment declined 8% year over year to $731.2 million. It was lower than our estimate of $795.9 million. Higher volumes and favorable currency were more than offset by lower energy cost pass-through and lower pricing.
Revenues in the Asia segment rose 2% year over year to $793.8 million. It was lower than our estimate of $799.2 million. Increased pricing and higher energy cost pass through were more than offset by unfavorable currency swings. Volumes were flat in the quarter as increased on-site volumes were masked by weak economic growth in China and reduced activity in helium.
Financials
Air Products ended the quarter with cash and cash items of $1.96 billion, up about 21% sequentially. Long-term debt was up around 26% sequentially to $11.72 billion.
Outlook
Air Products now expects fiscal 2024 adjusted EPS of $12.20-$12.50 (down from $12.80-$13.10 expected earlier), indicating 6-9% growth from the prior year’s adjusted EPS. For the second quarter of fiscal 2024, the company expects adjusted earnings per share in the range of $2.60-$2.75.
Air Products expects capital expenditures in the range of $5 billion to $5.5 billion for fiscal 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -13.58% due to these changes.
VGM Scores
At this time, Air Products and Chemicals has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Air Products and Chemicals has a Zacks Rank #4 (Sell). We expect a below average 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, Eastman Chemical (EMN - Free Report) , has gained 5.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Eastman Chemical reported revenues of $2.21 billion in the last reported quarter, representing a year-over-year change of -7%. EPS of $1.31 for the same period compares with $0.89 a year ago.
For the current quarter, Eastman Chemical is expected to post earnings of $1.49 per share, indicating a change of -8.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -10.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Eastman Chemical. Also, the stock has a VGM Score of B.
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Air Products and Chemicals (APD) Up 9.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Air Products and Chemicals (APD - Free Report) . Shares have added about 9.9% in that time frame, outperforming 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’ Q1 Earnings Miss as Americas Unit Sales Slump
Air Products logged first-quarter fiscal 2024 (ended Dec 31, 2023) earnings from continuing operations of $2.73 per share, up from $2.57 recorded in the year-ago quarter. The bottom line was driven by higher pricing and volumes as well as increased equity affiliates' income that more than offset higher costs.
Barring one-time items, adjusted earnings per share (EPS) were $2.82. It missed the Zacks Consensus Estimate of $2.99.
The industrial gases giant recorded revenues of roughly $3 billion, down around 6% year over year. The figure missed the Zacks Consensus Estimate of $3.3 billion. Higher prices (up 1%), higher volumes (up 3%) and favorable currency swings of 1% were more than offset by 11% lower energy cost pass-through.
The company faced headwinds from a slowdown in manufacturing in China, lower helium demand, higher costs from a sale of equipment project and the currency devaluation in Argentina.
Segment Highlights
Revenues in the Americas segment were down 10% year over year to $1.25 billion. The figure was below our estimate of $1.49 billion. Sales declined as higher volumes and pricing were more than offset by lower energy cost pass-through.
Revenues in the Europe segment declined 8% year over year to $731.2 million. It was lower than our estimate of $795.9 million. Higher volumes and favorable currency were more than offset by lower energy cost pass-through and lower pricing.
Revenues in the Asia segment rose 2% year over year to $793.8 million. It was lower than our estimate of $799.2 million. Increased pricing and higher energy cost pass through were more than offset by unfavorable currency swings. Volumes were flat in the quarter as increased on-site volumes were masked by weak economic growth in China and reduced activity in helium.
Financials
Air Products ended the quarter with cash and cash items of $1.96 billion, up about 21% sequentially. Long-term debt was up around 26% sequentially to $11.72 billion.
Outlook
Air Products now expects fiscal 2024 adjusted EPS of $12.20-$12.50 (down from $12.80-$13.10 expected earlier), indicating 6-9% growth from the prior year’s adjusted EPS. For the second quarter of fiscal 2024, the company expects adjusted earnings per share in the range of $2.60-$2.75.
Air Products expects capital expenditures in the range of $5 billion to $5.5 billion for fiscal 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -13.58% due to these changes.
VGM Scores
At this time, Air Products and Chemicals has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Air Products and Chemicals has a Zacks Rank #4 (Sell). We expect a below average 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, Eastman Chemical (EMN - Free Report) , has gained 5.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Eastman Chemical reported revenues of $2.21 billion in the last reported quarter, representing a year-over-year change of -7%. EPS of $1.31 for the same period compares with $0.89 a year ago.
For the current quarter, Eastman Chemical is expected to post earnings of $1.49 per share, indicating a change of -8.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -10.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Eastman Chemical. Also, the stock has a VGM Score of B.