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Air Products to Build Liquid Hydrogen Plant at La Porte

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Air Products and Chemicals, Inc. (APD - Free Report) has declared plans to construct a new liquid hydrogen plant at its industrial gas facility in La Porte, TX. The plant will draw hydrogen to be liquefied from Air Products' Gulf Coast hydrogen pipeline network and will produce around 30 tons per day. It is slated to be onstream in 2021.

The new investment plan in liquid hydrogen production facility helps Air Products in addressing higher customer demand and cashing in on opportunities in several markets. The additional capacity will allow the company to cater to rising demand for hydrogen from several industries in the United States.

Liquefied hydrogen from the La Porte facility will be delivered via trailers to customers in several industries that include chemical and petrochemical, electronics, edible fats and oils, material handling, Utilities and float glass.

The facility will join the company’s existing air separation unit as well as hydrogen and syngas production operations. Air Products' Gulf Coast hydrogen pipeline is the world's largest hydrogen plant and pipeline network system, which supplies more than 1.4 billion feet of hydrogen per day to customers.

Air Products’ shares have moved up 11.7% in a year, outperforming the industry’s 1.9% rise.



In July, the company raised adjusted earnings guidance for fiscal 2018. It projects adjusted earnings per share (EPS) in the range of $7.40-$7.45 (a 17-18% increase from the prior year), up from the previous guidance of $7.25-$7.40. The company expects adjusted earnings in the band of $1.95-$2.00 for the fiscal fourth quarter, up 11-14% year over year.

Revenues in the Industrial Gases – America segment increased year over year in the fiscal third quarter supported by strong hydrogen demand and favorable merchant gases volumes. Sales in the Industrial Gases – Europe, Middle East, and Africa (EMEA) and Industrial Gases – Asia segments climbed year over year on the back of higher volumes and pricing as well as favorable currency swings.

The company remains focused on growing its core industrial gases business. Moreover, the company’s strong balance sheet and cash flows will allow it to make more investments in the upcoming years. The company has a capacity to deploy at least $15 billion in high-return investments over the next five years, which will boost shareholders’ value.
 

 

Zacks Rank and Other Stocks to Consider

Air Products currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the basic materials space are Huntsman Corporation (HUN - Free Report) , Ingevity Corporation (NGVT - Free Report) and Celanese Corporation (CE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntsman has an expected long-term earnings growth rate of 8.5%. Its shares have returned 4% in a year.

Ingevity has an expected long-term earnings growth rate of 12%. Its shares have surged 65% in the past year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have gained 15.7% in the past year.

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