10-QPeriod: Q1 FY2011

Air Products & Chemicals, Inc. Quarterly Report for Q1 Ended Dec 31, 2010

Filed January 26, 2011For Securities:APD

Summary

Air Products & Chemicals, Inc. (APD) reported strong first-quarter 2011 results, with a notable 10% increase in sales to $2,391.7 million, driven by volume growth across its key segments: Electronics and Performance Materials, Tonnage Gases, and Merchant Gases. The company also demonstrated improved profitability, with operating income up 5% and net income up 7% on a GAAP basis. When excluding acquisition-related costs, the company's underlying performance showed even more significant gains, with a 17% increase in non-GAAP operating income and a 16% rise in non-GAAP diluted earnings per share. Investors should note the company's strategic focus on growth, evidenced by increased R&D spending and the positive contribution from its Tonnage Gases and Electronics and Performance Materials segments. Despite a slight decrease in GAAP operating margin, the non-GAAP figures highlight the underlying strength and operational efficiency improvements. The company maintains a strong financial position and expects its cash flow from operations and financing activities to meet its liquidity needs.

Financial Highlights

53 data points
Beta

Revenue

$2.29B

27.2% Gross Margin

Net Income

$268.60M

11.7% Net Margin

EPS (Diluted)

$1.23

Total Assets

$13.46B

Cash & Equivalents

$247.20M

Free Cash Flow

$29.70M

Financial Statements
Beta
Revenue$2.29B
Cost of Revenue$1.72B
Gross Profit$622.90M
R&D Expenses$29.20M
SG&A Expenses$244.60M
Operating Income$331.20M
Interest Expense$31.00M
Net Income$268.60M
EPS (Basic)$1.25
EPS (Diluted)$1.23
Shares Outstanding (Basic)214.20M
Shares Outstanding (Diluted)219.20M

Key Highlights

  • 1Sales increased by 10% to $2,391.7 million, driven by strong volume growth in key segments.
  • 2Operating income saw a 5% increase on a GAAP basis and a 17% increase on a non-GAAP basis, excluding acquisition-related costs.
  • 3Net income increased by 7% to $268.6 million, and diluted EPS rose 6% to $1.23 on a GAAP basis.
  • 4Non-GAAP diluted EPS grew by 16% to $1.35, reflecting underlying business performance.
  • 5The Merchant Gases segment experienced a 6% sales increase, with significant growth in Asia.
  • 6Tonnage Gases sales grew 10%, driven by higher volumes and new plant operations.
  • 7Electronics and Performance Materials segment sales surged 21%, primarily due to volume increases.

Frequently Asked Questions

The primary driver of the sales growth was increased volume across the Electronics and Performance Materials, Tonnage Gases, and Merchant Gases segments. Underlying sales, which exclude currency impacts, increased by 11%.

Acquisition-related costs, specifically those related to the Airgas transaction, reduced GAAP operating income and net income. On a non-GAAP basis, which excludes these costs, operating income increased by 17% and diluted EPS by 16%, indicating strong underlying business performance.

Air Products & Chemicals, Inc. maintains a strong financial position. The company expects its cash flow from operations and financing activities to meet its liquidity needs for the foreseeable future, with consistent access to commercial paper markets.

The Merchant Gases segment saw a 6% sales increase, with particularly strong growth in Asia. Tonnage Gases sales grew 10% due to higher volumes and new plant operations. The Electronics and Performance Materials segment experienced a significant 21% sales increase, driven by higher volumes across its sub-segments.