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Air Products fiscal 2Q profit slips 2 percent

ALLENTOWN, Pa. (AP) -- Air Products' second-quarter earnings slipped 2 percent and the company tempered growth expectations for the remainder of the year after seeing weaker than expected sales volumes.

The Allentown, Pa., company, which sells gases, chemicals and other equipment to industrial customers, said Tuesday that it now expects fiscal 2013 earnings to range from $5.45 to $5.60 per share, which is down from its January forecast for earnings of $5.70 to $5.90 per share.

Analysts had expected earnings of $5.76 per share, according to FactSet.

Chairman and CEO John McGlade said the company was challenged by slower economic growth in the United States, contraction in Europe, softness in China and a much weaker electronics market than Air Products had expected

In the three months that ended March 31, Air Products earned $290.4 million, or $1.38 per share. That compares with earnings of $296 million, or $1.38 per share, in last year's quarter, when the company had more shares outstanding. Earnings from continuing operations totaled $1.37 per share in this year's quarter.

Revenue rose 6 percent to $2.48 billion.

Analysts forecast earnings of $1.30 per share on $2.56 billion in revenue.

Air Products said acquisitions helped its revenue rise even as underlying sales fell due to a decision to leave the polyurethane intermediates business. Revenue from merchant gases jumped 14 percent to around $1 billion, largely due to the company's acquisition of Chilean industrial gas company Indura SA.

Revenue from tonnage gases climbed 3 percent to $809 million, but electronics and performance materials sales fell 3 percent to $549 million.

Selling and administrative expenses also rose 12 percent to $266.6 million compared to the 2012 quarter, which included a charge of nearly $87 million for a business restructuring.