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Air Products (APD) to Post Q4 Earnings: What's in the Offing?

Zacks Equity Research

Air Products and Chemicals, Inc. APD is slated to release fourth-quarter fiscal 2019 results ahead of the bell on Nov 7. The company is likely to have gained from higher volumes, pricing and productivity initiatives in the fiscal fourth quarter.

The stock has rallied 35.7% in the past year against the industry’s 26.7% decline.



What to Expect  

In July, the company revised its adjusted earnings per share (EPS) guidance for fiscal 2019 in the range of $8.20-$8.25 from the previous expectation of $8.15-$8.30. This suggests more than 10% rise year over year at the midpoint.

The company expects adjusted EPS for fourth-quarter fiscal 2019 in the band of $2.26-$2.31, which indicates 13-16% rise year over year.

The Zacks Consensus Estimate for Air Products’ fiscal fourth-quarter revenues is currently pegged at $2,322 million, suggesting a rise of nearly 1% year over year.

The Zacks Consensus Estimate for revenues in the Industrial Gases — Americas segment is currently pegged at $1,008 million, calling for an increase of 2.1% year over year. The consensus mark for the segment’s operating income is pegged at $284 million, indicating growth of 13.4% year over year.

The Zacks Consensus Estimate for revenues in the Industrial Gases — Asia segment is pegged at $765 million, which suggests 20.9% year-over-year growth. Operating income in the segment is projected at $248 million, reflecting year-over-year increase of 37.8%.

The Zacks Consensus Estimate for revenues in the Industrial Gases — EMEA segment is at $543 million, reflecting a decline of 2.2% year over year. The Zacks Consensus Estimate for operating income is pegged at $118 million, which indicates a rise of nearly 11.3% year over year.

The consensus mark for revenues in the Industrial Gases — Global segment is pegged at $86 million, which indicates a decline of 14% year over year. The consensus mark for the segment’s operating income is at $8.51 million, which indicates a plunge of 31.9% year over year.

Air Products’ investments in high-return projects, business deals and acquisitions are likely to get reflected in fiscal fourth-quarter results. The company is committed to boost productivity to improve cost structure. It is seeing positive impact of its productivity actions. Benefits from additional productivity and cost improvement programs are likely to have supported margins in the to-be-reported quarter.

However, the company is exposed to headwind from unfavorable currency movements, which made a negative impact on fiscal third-quarter sales and earnings. The unfavorable impact of currency is likely to have continued in the fiscal fourth quarter.

What the Zacks Model Says

Our proven model doesn’t conclusively predict an earnings beat for Air Products this time around. 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 -1.40%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at $2.26 and $2.29, respectively. 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 #4.

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

 

Stocks Poised to Beat Estimates

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

Franco-Nevada Corporation FNV has an Earnings ESP of +0.34% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross Gold Corporation KGC has an Earnings ESP of +2.50% and flaunts a Zacks Rank #1.

Pan American Silver Corp. PAAS has an Earnings ESP of +5.42% and carries a Zacks Rank #3.

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Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report
 
Kinross Gold Corporation (KGC) : Free Stock Analysis Report
 
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