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Industrial gas producer and supplier Praxair Inc. (PX - Free Report) reported better-than-expected results for first-quarter 2017 with earnings and revenues beating their respective estimates by 3% and 3.7%.
The company’s adjusted earnings were $1.37 per share, surpassing the Zacks Consensus Estimate of $1.33. Also, the bottom line grew 7% from the year-ago tally of $1.28.
Revenues generated in the quarter totaled $2.728 billion, above the Zacks Consensus Estimate of $2.63 billion. Also, the top line increased 8.7% year over year. The year-over-year improvement was driven by 4% gain from volume growth, 1% from favorable pricing, 2% cost pass-through, 1% gains from acquired assets and 1% positive impact from foreign currency movements.
Backlog was $1.5 billion at the quarter end.
Segmental Revenues
Praxair operates through five business segments. Their first quarter top-line results are briefed below:
Revenues generated in North America increased 7.8% year over year to $1,458 million. The segment’s revenues represented 53.4% of total revenue.
Revenues in the Europe, representing 13% of total revenue, increased 11.3% to $356 million.
In Asia, revenues increased 5.1% to $395 million and represented 14.5% of total revenue.
Surface Technologies revenues were $150 million, slightly above $149 million in the year-ago quarter. The segment’s revenues represented 5.5% of total revenue.
Revenues from South America increased 18.6% to $369 million. It represented 13.5% of total revenue.
Margins
In the quarter, Praxair’s cost of sales grew 11.9% year over year, representing 56.6% net sales compared with 55% recorded in the year-ago quarter. Gross margin decreased 160 basis points to 43.4%. Selling, general and administrative expenses increased 1.8% year over year to $279 million. Research and development expenses were flat at $23 million.
Adjusted operating profit came in at $588 million, up 6.1% year over year. Adjusted margin was 21.6%.
Balance Sheet & Cash Flow
Exiting the first quarter, Praxair had cash and cash equivalents of $519 million, down from $524 million recorded in the preceding quarter. Long-term debt inched up 0.3% sequentially to $8,947 million.
In the quarter, Praxair’s net cash generation from its operating activities increased 28.4% year over year to $710 million while capital spent on purchase of property, plant and equipment totaled $327 million, up 1.2% year over year.
During the quarter, Praxair repurchased shares worth $11 million and paid dividends of $225 million.
Concurrent with the earnings release, Praxair announced that its board of directors has approved payment of a quarterly dividend of 78.75 cents per share to shareholders on record as of Jun 7. The dividend will be paid on Jun 15.
Outlook
For 2017, Praxair anticipates benefitting from a talented workforce, sound product portfolio and new project wins. Base volume growth is predicted to be in sync with the prevailing macro conditions.
The company increased the lower-end of its previously projected guidance range of $5.45–$5.80 per share by 10 cents to $5.55–$5.80. Excluding 1% negative impact of foreign currency headwinds, earnings are predicted to grow 2–7% year over year. Capital spending is expected to be nearly $1.4 billion.
For the second quarter of 2017, Praxair expects earnings in the range of $1.38–$1.43 per share.
With a market capitalization of $35.7 billion, Praxair currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the chemical diversified industry include The Chemours Company (CC - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Methanex Corporation (MEOH - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Chemours Company reported a positive average earnings surprise of 151.56% for the last four quarters. Also, earnings expectations for 2017 and 2018 improved over the past 60 days.
Kronos Worldwide’s financial performance was impressive in the last four quarters, with an average positive earnings surprise of 72.01%. Also, the stock’s earnings estimates for 2017 were revised upward over the last 60 days.
Methanex Corporation witnessed positive revisions in earnings estimates for 2017 and 2018, over the past 60 days. Also, the company reported an average positive earnings surprise of 28.76% for the last four quarters.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Praxair (PX) Beats Q1 Earnings, Sales, Raises '17 View
Industrial gas producer and supplier Praxair Inc. (PX - Free Report) reported better-than-expected results for first-quarter 2017 with earnings and revenues beating their respective estimates by 3% and 3.7%.
The company’s adjusted earnings were $1.37 per share, surpassing the Zacks Consensus Estimate of $1.33. Also, the bottom line grew 7% from the year-ago tally of $1.28.
Revenues generated in the quarter totaled $2.728 billion, above the Zacks Consensus Estimate of $2.63 billion. Also, the top line increased 8.7% year over year. The year-over-year improvement was driven by 4% gain from volume growth, 1% from favorable pricing, 2% cost pass-through, 1% gains from acquired assets and 1% positive impact from foreign currency movements.
Backlog was $1.5 billion at the quarter end.
Segmental Revenues
Praxair operates through five business segments. Their first quarter top-line results are briefed below:
Revenues generated in North America increased 7.8% year over year to $1,458 million. The segment’s revenues represented 53.4% of total revenue.
Revenues in the Europe, representing 13% of total revenue, increased 11.3% to $356 million.
In Asia, revenues increased 5.1% to $395 million and represented 14.5% of total revenue.
Surface Technologies revenues were $150 million, slightly above $149 million in the year-ago quarter. The segment’s revenues represented 5.5% of total revenue.
Revenues from South America increased 18.6% to $369 million. It represented 13.5% of total revenue.
Margins
In the quarter, Praxair’s cost of sales grew 11.9% year over year, representing 56.6% net sales compared with 55% recorded in the year-ago quarter. Gross margin decreased 160 basis points to 43.4%. Selling, general and administrative expenses increased 1.8% year over year to $279 million. Research and development expenses were flat at $23 million.
Adjusted operating profit came in at $588 million, up 6.1% year over year. Adjusted margin was 21.6%.
Balance Sheet & Cash Flow
Exiting the first quarter, Praxair had cash and cash equivalents of $519 million, down from $524 million recorded in the preceding quarter. Long-term debt inched up 0.3% sequentially to $8,947 million.
In the quarter, Praxair’s net cash generation from its operating activities increased 28.4% year over year to $710 million while capital spent on purchase of property, plant and equipment totaled $327 million, up 1.2% year over year.
During the quarter, Praxair repurchased shares worth $11 million and paid dividends of $225 million.
Concurrent with the earnings release, Praxair announced that its board of directors has approved payment of a quarterly dividend of 78.75 cents per share to shareholders on record as of Jun 7. The dividend will be paid on Jun 15.
Outlook
For 2017, Praxair anticipates benefitting from a talented workforce, sound product portfolio and new project wins. Base volume growth is predicted to be in sync with the prevailing macro conditions.
The company increased the lower-end of its previously projected guidance range of $5.45–$5.80 per share by 10 cents to $5.55–$5.80. Excluding 1% negative impact of foreign currency headwinds, earnings are predicted to grow 2–7% year over year. Capital spending is expected to be nearly $1.4 billion.
For the second quarter of 2017, Praxair expects earnings in the range of $1.38–$1.43 per share.
Praxair, Inc. Price and Consensus
Praxair, Inc. Price and Consensus | Praxair, Inc. Quote
Zacks Rank & Key Picks
With a market capitalization of $35.7 billion, Praxair currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the chemical diversified industry include The Chemours Company (CC - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Methanex Corporation (MEOH - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Chemours Company reported a positive average earnings surprise of 151.56% for the last four quarters. Also, earnings expectations for 2017 and 2018 improved over the past 60 days.
Kronos Worldwide’s financial performance was impressive in the last four quarters, with an average positive earnings surprise of 72.01%. Also, the stock’s earnings estimates for 2017 were revised upward over the last 60 days.
Methanex Corporation witnessed positive revisions in earnings estimates for 2017 and 2018, over the past 60 days. Also, the company reported an average positive earnings surprise of 28.76% for the last four quarters.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>