Summary
Air Products & Chemicals, Inc. (APD) reported strong financial performance for the fiscal year ending September 29, 2010, driven by a significant recovery in its Electronics and Performance Materials segment and new investments in Tonnage Gases. Sales increased by 9%, with underlying business growth of 8%, reflecting improved economic conditions and increased volumes. Operating income saw a substantial increase of 64% (or 25% on a non-GAAP basis), signaling effective cost management and operational efficiencies following global cost reduction plans. The company also increased its quarterly dividend, marking the 28th consecutive year of dividend growth. A significant development during the year was the commencement of a tender offer to acquire Airgas, Inc., the largest U.S. distributor of industrial gases, valued at approximately $7.4 billion. While the acquisition was pending at the time of filing, the company had incurred acquisition-related costs and secured committed financing. The company's outlook for 2011 was positive, anticipating continued economic recovery and growth in global manufacturing, particularly in Asia, with projections for volume growth to be the primary driver of earnings improvement.
Financial Highlights
56 data points| Revenue | $8.62B |
| Cost of Revenue | $6.29B |
| Gross Profit | $2.52B |
| R&D Expenses | $114.70M |
| SG&A Expenses | $886.60M |
| Operating Income | $1.27B |
| Interest Expense | $121.90M |
| Net Income | $1.03B |
| EPS (Basic) | $4.85 |
| EPS (Diluted) | $4.74 |
| Shares Outstanding (Basic) | 212.20M |
| Shares Outstanding (Diluted) | 217.10M |
Key Highlights
- 1Sales increased by 9% to $9.03 billion, with underlying business growth of 8%, primarily driven by the Electronics and Performance Materials and Tonnage Gases segments.
- 2Operating income surged by 64% to $1.39 billion (or 25% higher on a non-GAAP basis to $1.49 billion), reflecting improved volumes, cost reductions, and favorable currency movements.
- 3Income from continuing operations increased by 61% to $1.03 billion, with diluted EPS from continuing operations rising 58% to $4.74 (or 24% higher on a non-GAAP basis to $5.02).
- 4The company increased its quarterly dividend to $0.49 per share, marking its 28th consecutive year of dividend increases.
- 5A tender offer was commenced in February 2010 to acquire Airgas, Inc. for approximately $7.4 billion, representing a major strategic initiative.
- 6Capital expenditures totaled $1.13 billion on a GAAP basis, with projections for 2011 indicating increased investment, primarily in the Tonnage Gases segment.
- 7The company ended the fiscal year with a solid financial position, a debt-to-equity ratio of 42.0%, and maintained consistent access to commercial paper markets.