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Air Products (APD) Earnings and Sales Beat Estimates in Q3

·4 min read

Air Products and Chemicals, Inc. APD logged earnings from continuing operations of $2.62 per share in third-quarter fiscal 2022 (ended Jun 30, 2022), up 11% from $2.36 recorded in the year-ago quarter. Earnings per share (EPS) beat the Zacks Consensus Estimate of $2.61. Our estimate for the quarter was $2.63.

The industrial gases giant delivered revenues of $3,189.3 million, up around 22% year over year. The figure beat the Zacks Consensus Estimate of $3,060 million. The figure compares to our estimate of $3,065.3 million.

The company benefited from increased pricing, higher equity affiliates' income and higher volumes in the reported quarter, partly masked by higher costs due to inflation, supply chain costs and maintenance activities, as well as unfavorable currency translation.

 

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 Americas segment were up 33% year over year to $1,416 million. This compares to the consensus estimate of $1,214.9 million and our estimate of $1,161.8 million. The upside was driven by higher pricing and energy cost pass-through as well as increased volumes, partly offset by unfavorable currency swings.

Revenues in the Europe segment rose 23% year over year to $740 million. This compares to the consensus estimate of $747.5 million and our estimate of $857.1 million. The segment witnessed higher pricing and energy pass-through, offset by lower volumes and the currency impact.
 
Revenues in the Asia segment were flat year over year at $751 million. This compares to the consensus estimate of $764.3 million and our estimate of $852.3 million. Higher volumes and pricing were offset by the unfavorable currency impact.

Equity affiliates' income in the Middle East & India segment increased to $67.2 million from $17.1 million in the prior-year quarter, mainly from the Jazan joint venture. This compares to our estimate of $47.6 million.

Financials

Air Products ended the fiscal third quarter with cash and cash equivalents of around $2,957.4 million, down around 31% year over year. Long-term debt was down 8% year over year to $6,348 million.

Outlook

Air Products continues to expect full-year fiscal 2022 adjusted EPS of $10.20-$10.40, indicating a 14% growth from the prior-year’s adjusted EPS. For the fourth quarter of fiscal 2022, the company expects adjusted EPS in the range of $2.68-$2.88, suggesting a rise of 7-15% from fourth-quarter fiscal 2021 adjusted EPS.

Air Products expects capital expenditures of more than $4.5 billion for full-year fiscal 2022.

Price Performance

The company’s shares have declined 15.5% in the past year compared with a 10.8% fall of the industry.

 

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Zacks Investment Research


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Zacks Rank & Key Picks

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

Better-ranked stocks worth considering in the basic materials space include Cabot Corporation CBT, Sociedad Quimica y Minera de Chile S.A. SQM and ATI Inc. ATI.

Cabot, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 0.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 38% over a year.

Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 57.8% upward in the past 60 days.

Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has gained roughly 99% in a year. The company sports a Zacks Rank #1.

ATI, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days.

ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI shares are up around 37% in a year.


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