Air Products 2Q Net Down 35%; Fiscal Year EPS View Cut Again

   DOW JONES NEWSWIRES 
 

Air Products & Chemicals Inc.'s (APD) fiscal second-quarter net income fell 35% on slumping demand, but Chairman and Chief Executive John McGlade expects the period to be the low point for the year.

Still, the industrial gas maker cut its fiscal-year earnings outlook a second time - to $3.85 to $4.05 a share from January's reduced view of $4 to $4.30, while seeing earnings in their fiscal third quarter of 93 cents to $1.02 a share. The mean estimate of analysts surveyed by Thomson Reuters was $1.06 for the fiscal third quarter.

Air Products has cut costs, including a 7% cut to its work force last year, as it reacts to the poor global economic environment. The company said Wednesday that because of the economy's continued woes, Air Products continues to look at additional cost-cutting steps and might record restructuring charges this year.

Despite the poor sales environment, the company was able to boost its dividend by a penny last month.

For the period ended March 31, Air Products reported net income of $205.6 million, or 97 cents a share, down from $314.3 million, or $1.43 a share, a year earlier. Earnings from continuing operations fell to 89 cents from $1.18. In January, the company projected 80 cents to 90 cents, below analysts' then-estimates.

Revenue dropped 23% to $1.96 billion on demand woes, the stronger dollar and lower commodity costs. Analysts polled by Thomson Reuters, on average, most recently expected $2.08 billion.

Gross margin was flat at 26.4%.

Revenue rose in Air Products' equipment and energy segment, by far the smaller of the company's four divisions. The biggest decline was in electronics and performance materials - 41% - amid slumping sales in the semiconductor industry. The business also swung to a small loss.

Shares closed Tuesday at $58.05 and were inactive premarket. The stock is up 15% this year but still down nearly 40% the past eight months.

-By John Kell and Kevin Kingsbury, Dow Jones Newswires, 201-938-5285; [e-mail]