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Air Products (APD) Earnings Beat, Revenues Miss Estimates in Q2
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Air Products and Chemicals, Inc. (APD - Free Report) logged second-quarter fiscal 2024 (ended Mar 31, 2024) earnings from continuing operations of $2.57 per share, up from $1.97 recorded in the year-ago quarter. The bottom line was driven by lower charges for business and asset actions, favorable pricing and lower other costs, which were more than offset by reduced equity affiliates' income, lower volumes and increased interest expense.
Barring one-time items, adjusted earnings per share were $2.85, beating the Zacks Consensus Estimate of $2.72.
The industrial gases giant reported revenues of $2,930.2 million, which was about 8% lower than the same period last year. This figure fell short of the Zacks Consensus Estimate of $3,151.6 million. Although prices increased by 1%, the upside was more than offset by a 6% decline in energy cost pass-through, which lowered sales but did not impact net income. Additionally, volumes were down by 2% and unfavorable currency fluctuations accounted for a 1% drop in revenues.
Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise
Revenues in the Americas segment declined 9% compared with the previous year’s levels, reaching $1,245.8 million, which was below our estimate of $1,355.9 million. The downside in sales was mainly due to a 12% reduction in energy cost pass-through and a 1% impact from unfavorable currency, partially offset by a 3% increase in pricing and a 1% rise in volumes.
In the Europe segment, revenues fell 11% year over year to $667.9 million, missing our estimate of $691.2 million. The downside was caused by a 6% decline in volumes and a 6% reduction in energy cost pass-through, along with a 1% drop in pricing. These effects were partially offset by a 2% benefit from favorable currency rates.
Revenues in the Asia segment experienced a 4% decline from the previous year’s levels, landing at $779.7 million, which fell short of our estimate of $840.4 million. The downtick was primarily due to a 4% impact from unfavorable currency and a 1% decline in volumes, partially balanced by a 1% increase in energy cost pass-through.
Financials
Air Products ended the quarter with cash and cash items of $2,535 million, up about 29% sequentially. Total long-term debt was up around 5.3% sequentially to nearly $12,500 million.
Outlook
Air Products continues to expect fiscal 2024 adjusted earnings per share (EPS) of $12.20-$12.50, indicating 6-9% growth from the prior year’s adjusted EPS. For the third quarter of fiscal 2024, the company expects adjusted EPS in the range of $3-$3.05.
Air Products expects capital expenditures in the range of $5-$5.5 billion for the fiscal 2024.
Price Performance
The company’s shares have lost 19.6% in the past year compared with a 6.2% decline in the industry.
The consensus estimate for GFI’s first-quarter earnings is pegged at 22 cents per share. The Zacks Consensus Estimate for GFI’s first-quarter earnings has been stable in the past 60 days. The company’s shares have increased 16% in the past year.
CRS is slated to report fiscal third-quarter results on May 1. The consensus estimate for CRS’ fiscal third-quarter earnings is pegged at 94 cents per share, indicating a year-over-year surge of 147.4%. CRS beat on earnings in three of the last four quarters, delivering an average surprise of 12.2%. The company’s shares have surged 62.3% in the past year.
Ingevity is slated to report first-quarter results on May 1. The consensus estimate for NGVT’s first-quarter earnings is pegged at 37 cents per share. NGVT has a trailing four-quarter earnings surprise of 61.8%, on average.
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Air Products (APD) Earnings Beat, Revenues Miss Estimates in Q2
Air Products and Chemicals, Inc. (APD - Free Report) logged second-quarter fiscal 2024 (ended Mar 31, 2024) earnings from continuing operations of $2.57 per share, up from $1.97 recorded in the year-ago quarter. The bottom line was driven by lower charges for business and asset actions, favorable pricing and lower other costs, which were more than offset by reduced equity affiliates' income, lower volumes and increased interest expense.
Barring one-time items, adjusted earnings per share were $2.85, beating the Zacks Consensus Estimate of $2.72.
The industrial gases giant reported revenues of $2,930.2 million, which was about 8% lower than the same period last year. This figure fell short of the Zacks Consensus Estimate of $3,151.6 million. Although prices increased by 1%, the upside was more than offset by a 6% decline in energy cost pass-through, which lowered sales but did not impact net income. Additionally, volumes were down by 2% and unfavorable currency fluctuations accounted for a 1% drop in revenues.
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 Americas segment declined 9% compared with the previous year’s levels, reaching $1,245.8 million, which was below our estimate of $1,355.9 million. The downside in sales was mainly due to a 12% reduction in energy cost pass-through and a 1% impact from unfavorable currency, partially offset by a 3% increase in pricing and a 1% rise in volumes.
In the Europe segment, revenues fell 11% year over year to $667.9 million, missing our estimate of $691.2 million. The downside was caused by a 6% decline in volumes and a 6% reduction in energy cost pass-through, along with a 1% drop in pricing. These effects were partially offset by a 2% benefit from favorable currency rates.
Revenues in the Asia segment experienced a 4% decline from the previous year’s levels, landing at $779.7 million, which fell short of our estimate of $840.4 million. The downtick was primarily due to a 4% impact from unfavorable currency and a 1% decline in volumes, partially balanced by a 1% increase in energy cost pass-through.
Financials
Air Products ended the quarter with cash and cash items of $2,535 million, up about 29% sequentially. Total long-term debt was up around 5.3% sequentially to nearly $12,500 million.
Outlook
Air Products continues to expect fiscal 2024 adjusted earnings per share (EPS) of $12.20-$12.50, indicating 6-9% growth from the prior year’s adjusted EPS. For the third quarter of fiscal 2024, the company expects adjusted EPS in the range of $3-$3.05.
Air Products expects capital expenditures in the range of $5-$5.5 billion for the fiscal 2024.
Price Performance
The company’s shares have lost 19.6% in the past year compared with a 6.2% decline in the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
APD currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Gold Fields Limited (GFI - Free Report) and Ingevity Corporation (NGVT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) and Carpenter Technology Corporation (CRS - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for GFI’s first-quarter earnings is pegged at 22 cents per share. The Zacks Consensus Estimate for GFI’s first-quarter earnings has been stable in the past 60 days. The company’s shares have increased 16% in the past year.
CRS is slated to report fiscal third-quarter results on May 1. The consensus estimate for CRS’ fiscal third-quarter earnings is pegged at 94 cents per share, indicating a year-over-year surge of 147.4%. CRS beat on earnings in three of the last four quarters, delivering an average surprise of 12.2%. The company’s shares have surged 62.3% in the past year.
Ingevity is slated to report first-quarter results on May 1. The consensus estimate for NGVT’s first-quarter earnings is pegged at 37 cents per share. NGVT has a trailing four-quarter earnings surprise of 61.8%, on average.