Air Products & Chemicals Revenue Falls on Lower Energy Pass-Through

By Austen Hufford

Air Products & Chemicals Inc. posted a revenue decline on lower energy pass-through but increased its profit as expenses fell more.

Chief Executive Seifi Ghasemi said the company performed well "despite sluggish economic growth worldwide and continued currency headwinds."

Revenue decreased as 4% higher volumes were more than offset by 3% lower energy pass-through and 2% unfavorable currency rates. The volume increases were driven by the industrial gases segments in its global segment and in Asia and North America segments. Pricing was flat.

Still, Air Products raised the bottom end of its yearly profit forecast, now expecting $7.45 to $7.55 in adjusted earnings per share, adding 5 cents to the bottom of the range it expected previously. For the current quarter, Air Products expects adjusted per-share earnings of between $1.91 and $2.01. Analysts polled by Thomson Reuters had expected earnings per share of $1.97.

Air Products said in May that it would sell its performance-materials division for $3.8 billion to Evonik Industries AG. Last year, the company said it aimed to split into two publicly traded companies: materials technologies, which houses the performance business, and industrial gases. Air Products said it still intends to spin off the rest of its materials technologies division, which includes electronic materials, sometime this year.

For the quarter, the company posted a profit of $346.8 million, or $1.59 a share, from a profit of $318.8 million, or $1.47 a year prior. Excluding special charges, adjusted per-share earnings from continuing operations was $1.92.

Revenue declined 1.4% to $2.43 billion.

Expenses fell more, with cost of sales falling 4.4% and selling and administrative expenses decreasing 12%.

Analysts polled by Thomson Reuters had expected adjusted earnings per share of $1.91 on revenue of $2.42 billion.

Industrial gas sales decreased by 7.3% in the Americas--which represents 35% of the topline--and by 6.1% in the Europe, Middle East and Africa region. In Asia, sales climbed 7.2%. Sales in the global industrial gas sales unit more than doubled. The company's materials segment posted a 7.2% revenue increase to $447.6 million.

The company said it intends to spin off its materials technologies business, to be known as Versum Materials, and is currently "assessing market conditions to determine favorability for a spinoff."

Shares, up 0.3% in the last three months, were inactive in premarket trading.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

July 28, 2016 07:33 ET (11:33 GMT)

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