Summary
Air Products & Chemicals, Inc. (APD) reported its second quarter fiscal year 2012 results, with sales slightly down 2% to $2,344.3 million. While reported income from continuing operations saw a modest 2% decrease to $279.0 million, earnings per diluted share remained largely stable at $1.30, down 1%. The company highlighted a 2% increase in underlying sales driven by higher volumes in Tonnage Gases and improved pricing in Merchant Gases, though this was offset by a 3% decrease due to lower natural gas prices impacting cost pass-throughs. Significant events during the quarter included the initiation of a cost reduction plan involving approximately 600 job eliminations, expected to yield $60 million in annual savings by 2013. The company also continued its capital return program, repurchasing $53.1 million in shares and increasing its quarterly dividend for the 30th consecutive year to $0.64 per share. Additionally, APD expects to complete the sale of its Homecare business to The Linde Group in the third quarter, anticipating a gain of $140-$170 million. Operationally, the Merchant Gases segment faced challenges with declining volumes, while Tonnage Gases benefited from increased volumes. The Electronics and Performance Materials segment saw flat sales, with weaker electronics demand offset by growth in performance materials. The Equipment and Energy segment experienced a decline due to reduced LNG heat exchanger activity. Investors should note the company's continued focus on cost management and capital returns, alongside strategic divestitures, as it navigates a mixed operational environment.
Financial Highlights
55 data points| Revenue | $2.34B |
| Cost of Revenue | $1.72B |
| Gross Profit | $628.50M |
| R&D Expenses | $29.80M |
| SG&A Expenses | $237.30M |
| Operating Income | $287.90M |
| Interest Expense | $29.40M |
| Net Income | $296.00M |
| EPS (Basic) | $1.40 |
| EPS (Diluted) | $1.38 |
| Shares Outstanding (Basic) | 211.10M |
| Shares Outstanding (Diluted) | 215.00M |
Key Highlights
- 1Sales decreased 2% to $2,344.3 million, but underlying sales increased 2% due to higher volumes and pricing in key segments.
- 2Reported income from continuing operations declined 2% to $279.0 million, with diluted EPS at $1.30.
- 3Initiated a cost reduction plan involving ~600 job eliminations, targeting $60 million in annual savings by 2013.
- 4Announced expectation of completing the sale of the Homecare business for approximately $785 million, with an anticipated after-tax gain of $140-$170 million.
- 5Increased quarterly dividend by 10% to $0.64 per share, marking the 30th consecutive annual increase.
- 6Purchased $53.1 million of common stock under its $1 billion repurchase program, with $946.9 million remaining authorization.
- 7The Tonnage Gases segment saw improved operating income driven by a 7% volume increase, while Merchant Gases operating income declined due to lower volumes.