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Air Products' (APD) Earnings Lag Estimates in Q2, Sales Beat

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·3 min read
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Air Products and Chemicals, Inc. APD logged earnings from continuing operations of $2.13 per share in second-quarter fiscal 2021 (ended Mar 31, 2021), down 4% from $2.21 recorded in the year-ago quarter. The bottom line was hurt by the impact of the coronavirus outbreak.

Adjusted earnings per share (EPS) in the reported quarter were $2.08, which missed the Zacks Consensus Estimate of $2.13.

In the quarter under review, the industrial gases giant delivered revenues of $2,502 billion, up around 12.9% year over year. The figure beat the Zacks Consensus Estimate of $2,358.9 million.

Pricing increased 2% along with 4% favorable currency and 7% higher energy pass-through. Volumes were flat year over year due to reduced merchant demand, impacts of the winter storm Uri and lower contribution from the Lu'An gasification project in Asia.

Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise

Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise
Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise

Air Products and Chemicals, Inc. price-consensus-eps-surprise-chart | Air Products and Chemicals, Inc. Quote

Segment Highlights

Revenues in the Industrial Gases - America segment were up 13% year over year to $1,056 million due to higher pricing, higher energy cost pass-through and favorable currency.

Revenues in the Industrial Gases - Europe, Middle East, and Africa (EMEA) segment increased 19% year over year to $585 million. Increased volumes driven by acquisitions and higher onsite volumes were partly offset by lower demand. The segment also witnessed higher pricing and energy pass-through.

Revenues in the Industrial Gases - Asia segment increased 6% year over year to $698 million. The upside can be attributed to favorable currency and higher pricing, partly offset by lower volumes.

Financials

Air Products ended fiscal second quarter with cash and cash equivalents of around $5.79 billion, up 160.6% year over year. Long-term debt was up 109.7% year over year to $6,804.6 million.

Outlook

Air Products expects EPS of $8.95-$9.10 for fiscal 2021 and $2.30-$2.40 for the third quarter of fiscal 2021. The company expects capital spending of roughly $2.5 billion for the fiscal, excluding the Jazan transaction.

Price Performance

The company’s shares have gained 24.9% in the past year compared with 74.8% surge of the industry.

Zacks Rank & Key Picks

Air Products currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Dow Inc. DOW, Nucor Corporation NUE and Impala Platinum Holdings Limited IMPUY.

Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 103.7% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has an expected earnings growth rate of around 228.4% for the current year. The company’s shares have gained 143.1% in the past year. It currently sports a Zacks Rank #1.

Impala has an expected earnings growth rate of 197.6% for the current fiscal. The company’s shares have skyrocketed 253.1% in the past year. It currently flaunts a Zacks Rank #1.

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Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report

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