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Air Products (APD) to Post Q1 Earnings: What's in the Cards?

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Air Products and Chemicals, Inc. APD is slated to release first-quarter fiscal 2021 results before the bell on Feb 4. The company is expected to have gained from pricing and productivity initiatives in the quarter. However, the impacts of the coronavirus pandemic and some volume pressure are likely to get reflected on its results.

The industrial gases giant missed the Zacks Consensus Estimate for earnings in three of the trailing four quarters while beat once. In this timeframe, it delivered a negative earnings surprise of 0.3%, on average. The company delivered a negative earnings surprise of around 1.8% in the last reported quarter.

The company’s shares have gained 10.6% in the past year against the industry’s 21% rise.


Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for Air Products’ fiscal first-quarter revenues is currently pegged at $2,321 million, suggesting a rise of 2.9% year over year.

The Zacks Consensus Estimate for revenues for the Industrial Gases — Americas segment is currently pegged at $948 million, calling for a rise of 1.3% year over year. The consensus mark for revenues in the Industrial Gases — Asia segment is pegged at $706 million, which suggests 1.9% year-over-year growth.

The Zacks Consensus Estimate for revenues in the Industrial Gases — EMEA segment stands at $513 million, indicating a 2.8% year-over-year increase.

The consensus mark for revenues for the Industrial Gases — Global segment is pegged at $97 million, which indicates a rise of 4.3% year over year.

Some Factors at Play

Air Products’ productivity actions, investments in high-return projects and benefits of acquisitions are expected to get reflected on results in the to-be-reported quarter. New plants are likely to have contributed to its volumes.

Moreover, Air Products is boosting productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions. Benefits from additional productivity and cost improvement programs are likely to have supported margins in the fiscal first quarter.

Air Products also has been benefiting from higher pricing over the past several quarters and the same is expected to have continued in the fiscal first quarter.

However, the company’s results are likely to reflect the unfavorable impacts from the coronavirus pandemic and weak merchant volumes. Air Products faced headwinds from lower year over year volumes in the Americas and Asia in the last reported quarter while volumes were flat in its EMEA business. The recent surge in coronavirus cases in the Americas and Europe are likely to have hurt merchant volumes in these regions in the quarter to be reported. As such, some volume pressure is likely to have continued in the fiscal first quarter amid disruptions from the pandemic.

Air Products and Chemicals, Inc. Price and EPS Surprise

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

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

Zacks Model

Our proven model does not conclusively predict an earnings beat for Air Products this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Air Products is 0.00%. The Zacks Consensus Estimate for earnings for the fiscal first quarter is currently pegged at $2.19. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Air Products currently carries a Zacks Rank #3.

Other Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:

Tronox Holdings plc TROX, scheduled to release earnings on Feb 17, has an Earnings ESP of +57.14% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bunge Limited BG, scheduled to release earnings on Feb 10, has an Earnings ESP of +3.09% and carries a Zacks Rank #2.

Ecolab Inc. ECL, scheduled to release earnings on Feb 16, has an Earnings ESP of +0.08% and carries a Zacks Rank #3.

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