Air Products Revenue Hurt By Strong Dollar

   By Angela Chen 
 

Air Products & Chemicals Inc. said that higher volumes in several segments were unable to offset the impact of the stronger dollar in the first quarter, leading to weaker-than-expected revenue.

However, its earnings beat expectations, and the company raised the bottom end of its full-year earnings guidance by 5 cents, now expecting $6.35 to $6.55 a share.

Allentown, Pa.-based Air Products--which produces chemical ingredients for antifreeze, semiconductors, food and other items--has been reorganizing following pressure from activist investor William Ackman. In September, the company announced that it will restructure into seven reporting segments, months after the company named Mr. Ghasemi its new chief executive.

In the latest quarter, Air Products reported earnings of $325 million, or $1.50 cents a share, up from $290 million, or $1.35 a share, a year earlier.

However, excluding special items such as restructuring fees, per-share earnings were $1.55, up from $1.34 a year ago.

The company had projected earnings of $1.45 and $1.50 per share, compared with analysts' estimates of $1.49.

Sales rose 1% to $2.56 billion from a year ago. Higher volumes and pricing were offset by unfavorable currency impacts, as well as the company's exit from its polyurethane intermediates business. Excluding these impacts, sales increased 5%.

Analysts had projected a top line of $2.65 billion.

The stronger dollar hit hardest in Europe, the Middle East, and Africa, where sales fell 9% to $501 million due to the 7% currency impact.

Sales in the Americas increased 6% from the year earlier, due to higher volume and pricing.

Asia sales increased 1%, with higher volumes offset by lower currency as well.

Revenue in materials technologies, including electronics, grew 9% to $524 million, mostly due to 11% higher sales volume.

For the current quarter, the company expects earnings per share between $1.50 and $1.55, compared to analysts' forecast of $1.54.

Shares of Air Products have been up about 31% in the past 12 months through Wednesday's close.

Write to Angela Chen at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires