Air Products (APD) to Report Q1 Earnings: What's in the Cards?
Air Products and Chemicals, Inc. APD is slated to release first-quarter fiscal 2024 results before the bell on Feb 5.
The industrial gas giant beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It pulled off a trailing four-quarter earnings surprise of around 1.1%, on average. The company delivered an earnings surprise of around 1.3% in the last reported quarter.
Air Products is expected to have gained from cost-improvement and productivity initiatives in the first quarter. Higher volumes in the Americas segment and pricing gains are also expected to have aided the company's performance.
Shares of the company have lost 13.5% in the past year compared with an 18.8% decline of the industry.
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What Do the Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter currently stands at $3,306.4 million, which suggests a rise of 4.2% from the year-ago reported number.
Our estimate for the Americas segment’s revenues is currently pegged at $1,493.6 million, indicating an increase of 7.9% year over year.
The same for the Asia segment’s revenues is pegged at $799.2 million, which suggests a 2.8% year-over-year growth.
Our estimate for the Europe segment’s revenues stands at $795.9 million, indicating a 0.5% year-over-year rise.
Factors at Play
Air Products is likely to have benefited from volume gains in the Americas division and higher pricing in the fiscal first quarter. Investments in high-return projects, new business deals, acquisitions and productivity measures are also likely to have aided the company’s performance.
The company remains focused on its gasification strategy and is executing its growth projects. These initiatives are likely to have contributed to its earnings and cash flows. APD is realizing the benefits of the completion of the second phase of the Jazan project in Saudi Arabia.
Air Products is also driving 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 its margins in the first quarter.
However, the slowdown in China and Europe might have affected the company’s business in these regions. A slower economic recovery in China and the softness in electronics are likely to have impacted volumes in the Industrial Gases - Asia segment. Air Products is also expected to have witnessed weak demand for merchant products in Europe in the to-be-reported quarter.
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 -0.72%. The Zacks Consensus Estimate for earnings for the fiscal first quarter is currently pegged at $2.99. 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 #2.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Nutrien Ltd. NTR, scheduled to release earnings on Feb 21, has an Earnings ESP of +8.52% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for NTR’s earnings for the fourth quarter is currently pegged at 72 cents.
Agnico Eagle Mines Limited AEM, slated to release earnings on Feb 15, has an Earnings ESP of +8.23% and carries a Zacks Rank #3 at present.
The consensus mark for AEM’s fourth-quarter earnings is currently pegged at 46 cents.
Kinross Gold Corporation KGC, scheduled to release fourth-quarter earnings on Feb 14, has an Earnings ESP of +12.11%.
The Zacks Consensus Estimate for Kinross' earnings for the fourth quarter is currently pegged at 9 cents. KGC currently 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
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
Nutrien Ltd. (NTR) : Free Stock Analysis Report
