10-QPeriod: Q2 FY2013

Air Products & Chemicals, Inc. Quarterly Report for Q2 Ended Mar 31, 2013

Filed April 25, 2013For Securities:APD

Summary

Air Products & Chemicals, Inc. (APD) reported solid financial results for the quarter ended March 31, 2013. Sales increased by 6% year-over-year, driven by a combination of acquisitions and improved performance in several segments, particularly Merchant Gases, which saw a 14% sales increase partly due to the acquisition of Indura S.A. Operating income also showed a significant improvement of 35% on a GAAP basis, largely due to the absence of a significant restructuring charge recorded in the prior year. On a non-GAAP basis, operating income still grew by 4%, demonstrating underlying business strength. Key financial highlights include a 5% increase in diluted earnings per share from continuing operations to $1.37. The company continued its commitment to shareholder returns by increasing its quarterly dividend by 11%, marking the 31st consecutive year of dividend increases. While underlying sales showed a modest decrease of 2% due to volume declines in certain segments, the overall revenue growth, coupled with effective cost management and strategic acquisitions, indicates a positive operational trajectory for Air Products.

Financial Highlights

55 data points
Beta

Revenue

$2.48B

27.0% Gross Margin

Net Income

$290.40M

11.7% Net Margin

EPS (Diluted)

$1.38

Total Assets

$17.22B

Cash & Equivalents

$401.60M

Free Cash Flow

-$30.50M

Financial Statements
Beta
Revenue$2.48B
Cost of Revenue$1.81B
Gross Profit$670.60M
R&D Expenses$32.30M
SG&A Expenses$266.60M
Operating Income$389.70M
Interest Expense$35.20M
Net Income$290.40M
EPS (Basic)$1.39
EPS (Diluted)$1.38
Shares Outstanding (Basic)208.40M
Shares Outstanding (Diluted)211.00M

Key Highlights

  • 1Sales increased by 6% to $2,484.2 million, driven by acquisitions and strong performance in the Merchant Gases segment.
  • 2Operating income rose by 35% to $389.7 million (GAAP basis), benefiting from the absence of prior-year restructuring charges.
  • 3Diluted earnings per share from continuing operations increased by 5% to $1.37.
  • 4The company increased its quarterly dividend by 11% to $0.71 per share, highlighting a consistent commitment to shareholder returns.
  • 5Acquisitions, including Indura S.A. and DA NanoMaterials, contributed positively to sales growth.
  • 6Underlying sales experienced a 2% decrease, primarily due to lower volumes in Merchant Gases and Electronics and Performance Materials, indicating some segment-specific headwinds.
  • 7The company continued its share repurchase program, with $485.3 million remaining authorization as of March 31, 2013.

Frequently Asked Questions

The primary drivers for the 6% sales increase were contributions from recent acquisitions, including Indura S.A. and DA NanoMaterials, as well as higher sales in the Merchant Gases segment. Contractual pass-through of energy and raw material costs also contributed.

Operating income saw a substantial increase primarily due to the absence of a significant cost reduction plan charge recorded in the prior year. On a non-GAAP basis, operating income grew 4% driven by improved cost performance, including benefits from restructuring initiatives and acquisitions, partially offset by lower volumes and weaker raw material cost recovery.

Air Products demonstrated its commitment to shareholder returns by increasing its quarterly dividend by 11% to $0.71 per share, marking the 31st consecutive year of dividend increases. Additionally, the company continued its share repurchase program, with significant authorization remaining.

Yes, while overall sales grew, underlying sales saw a 2% decrease. This was primarily due to lower volumes in the Merchant Gases and Electronics and Performance Materials segments. The company also noted lower volumes in its European Merchant Gases and Electronics businesses for the first six months.