Air Products and Chemicals (NYSE:APD)
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Air Products & Chemicals Inc.'s (APD) fiscal first-quarter net income tumbled 74% on restructuring costs and slumping demand as the industrial gas maker cut expectations for the year and projected second-quarter earnings below analysts' estimates.

President and Chief Executive John McGlade said Air Products saw further deterioration in business conditions during the quarter, which resulted "in one of the weakest economic environments we've ever seen." He added the shock to the global economy has "shattered consumer confidence, which has significantly impacted customers' operating rates" across most of its markets. The company is continuing to take "aggressive actions to reduce costs."

Still, he said the company has "a good backlog of projects and opportunities in front of us," with a solid balance sheet and access to capital.

For the period ended Dec. 31, Air Products reported net income of $68.6 million, or 32 cents a share, down from $263.7 million, or $1.19 a share, a year earlier. Excluding restructuring charges, earnings from continuing operations fell to 97 cents from $1.18. The company in December lowered its per-share earnings outlook to 95 cents to $1.

Revenue fell 8.8% to $2.2 billion on weaker volumes and the stronger dollar. Analysts as polled by Thomson Reuters most recently were expecting $2.2 billion

Gross margin slumped to 25.8% from 27.2% amid the sales decline.

The company posted weaker results across the board, most notably at its much smaller electronics and performance-materials segment. Its profits tumbled 63% as sales dropped 21% amid the demand woes in the semiconductor industry, which has been cutting expectations far and wide as sales slump.

Meanwhile, Air Products lowered its forecast for fiscal 2009 earnings to a range of $4 to $4.30 from October's bearish outlook of $5.10 to $5.35. Analysts most recently were looking for $4.49 a share. For the current quarter, profit of 80 cents to 90 cents was projected by the company; analysts were expecting $1.07.

Air Products had posted several years of consistent profit and sales growth before the fall's demand slump, which has led to layoffs. The stronger dollar also has damped results.

Shares closed Tuesday's session at $52.64 and weren't active in premarket trading. The stock is down by half since June.

-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310; shirleen.dorman@dowjones.com

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