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Air Products' (APD) Earnings Lag, Sales Top Estimates in Q1

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·3 min read
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Air Products and Chemicals, Inc. APD logged earnings from continuing operations of $2.12 per share in first-quarter fiscal 2021 (ended Dec 31, 2020), down 1% from $2.14 recorded in the year-ago quarter. The bottom line was hurt by the impact of the coronavirus outbreak. Earnings per share in the reported quarter also missed the Zacks Consensus Estimate of $2.19.

In the quarter under review, the industrial gases giant delivered revenues of $2,375.2 billion, up around 5.3% year over year. The figure beat the Zacks Consensus Estimate of $2,321.3 million.

Pricing increased 2%, which along with 3% favorable currency and 1% higher energy pass-through, offset 1% decline in volumes on reduced demand 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 flat year over year at $933 million due to lower volumes, offset by higher pricing and energy pass-through.

Revenues in the Industrial Gases - Europe, Middle East, and Africa (EMEA) segment rose 13% year over year to $563 million. Increased volumes driven by acquisitions and higher onsite volumes were partly offset by lower packaged gas demand. Higher pricing and favorable currency more than offset lower energy pass-through.

Revenues in the Industrial Gases - Asia segment increased 4% year over year to $718 million. The upside can be attributed to favorable currency and higher pricing and energy pass-through.

Financials

Air Products ended fiscal first quarter with cash and cash equivalents of around $5.8 billion, up 140.6% year over year. Long-term debt was up 130.8% year over year to $6,779.1 million.

Outlook

Air Products’ is confident in its profitable growth strategy of delivering innovative solutions for energy and environmental challenges despite the global economic uncertainty. It expects to meet customers’ and countries’ target for achieving cleaner and more sustainable solutions with its strong portfolio.

The company is expecting good opportunities in gasification, carbon capture and hydrogen for mobility. It expects to continue to develop and invest in strategic opportunities to drive growth for decades to come.

Price Performance

The company’s shares have gained 10.5% in the past year compared with 18.4% rise of the industry.

Zacks Rank & Key Picks

Air Products currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Fortescue Metals Group Limited FSUGY, BHP Group BHP and Impala Platinum Holdings Limited IMPUY.

Fortescue has a projected earnings growth rate of 74.2% for the current fiscal. The company’s shares have surged around 124.9% in a year. It currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 59.5% for the current fiscal. The company’s shares have gained around 26.8% in the past year. It currently flaunts a Zacks Rank #1.

Impala has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 39.4% in the past year. It currently sports a Zacks Rank #1.

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