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Air Products Expands Nitrogen Supply, Fortifies Foothold

Zacks Equity Research

Air Products and Chemicals, Inc. APD announced that it was awarded an additional on-site nitrogen supply by one of its strategic global customers for a new production line in Binhai New Area, Tianjin, China. Notably, the customer is one of world's largest manufacturers of electronic components.

Air Products has been supporting the customer's expansion and supplying on-site nitrogen at the manufacturing site in Tianjin for more than 12 years. Air Products is building several facilities that include three currently operational and two scheduled to start up within next few months. It will add the sixth facility that will strengthen the company’s supply position in the Beijing-Tianjin-Hebei region. This will cater to the increasing need from the new production line.

Air Products has been serving the global electronics industry for more than four decades. Its ongoing investment in the strategic Beijing-Tianjin-Hebei region is part of its strategy to support the development of electronics manufacturing industry of China under the 13th Five-Year Plan and beyond.

Binhai New Area is a high-end modern manufacturing and R&D base that takes advantage of the Beijing-Tianjin-Hebei development. The area serves as the gate to northern China and is a northern international shipping and logistics center. Per the company, the region is also China's third economic growth pole. Additionally, Air Products also supplies customers in other key electronics manufacturing bases such as Nanjing, Xi'an and Fujian Province.  

Shares of Air Products have lost 10.3% in the past year compared with the industry’s decline of 27.2%.



Air Products projects adjusted earnings per share (EPS) of $8.05-$8.30 for fiscal 2019, reflecting a 10% year-over-year increase at the midpoint. Moreover, the company expects adjusted EPS of $1.85-$1.90 for first-quarter fiscal 2019, reflecting a rise of 5% at the midpoint.

Air Products has the capacity to deploy at least $14 billion in high-return investments in the next four years, which will boost shareholders’ value. Acquisitions and new business deals are also expected to drive results in the near term.

Air Products and Chemicals, Inc. Price and Consensus

Air Products and Chemicals, Inc. Price and Consensus | Air Products and Chemicals, Inc. Quote

Zacks Rank & Other Key Picks

Air Products currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the basic materials space are Ingevity Corporation NGVT, The Mosaic Company MOS and Israel Chemicals Ltd. ICL. While Ingevity sports a Zacks Rank #1 (Strong Buy), Mosaic and Israel Chemicals carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingevity has an expected earnings growth rate of 21.5% for 2019. The company’s shares have gained 15.5% in the past year.

Mosaic has an expected earnings growth rate of 24% for 2019. Its shares have moved up 16.8% in a year’s time.

Israel Chemicals has an expected earnings growth rate of 5.4% for 2019. Its shares have rallied 29.1% in a year’s time.

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