Summary
Air Products & Chemicals, Inc. (APD) reported its fiscal second quarter and first six months results for 2014. For the quarter, sales increased 4% to $2.58 billion, driven by a 4% increase from energy cost pass-through. However, operating income slightly decreased by 1% to $384.7 million, impacting the operating margin, which declined to 14.9% due to higher costs and pass-through effects. Net income from continuing operations attributable to Air Products for the quarter was $283.5 million, a 2% decrease from the prior year, resulting in diluted EPS of $1.32. The company highlighted an 8% increase in its quarterly dividend to $0.77 per share, marking its 32nd consecutive annual increase. For the first six months of 2014, sales grew 2% to $5.13 billion. Operating income saw a modest 1% increase to $770.3 million, while net income from continuing operations rose slightly by 1% to $570.6 million, with diluted EPS at $2.66. The company continues to manage its financial position effectively, with strong cash flow from operations. While underlying sales were flat for the six-month period due to mixed segment performance and the planned exit from the polyurethane intermediates (PUI) business, the Electronics and Performance Materials segment showed significant strength with an 8% sales increase and a 37% rise in operating income. APD also noted it is in compliance with all debt covenants and continues to have access to credit markets.
Financial Highlights
55 data points| Revenue | $2.58B |
| Cost of Revenue | $1.92B |
| Gross Profit | $664.30M |
| R&D Expenses | $33.20M |
| SG&A Expenses | $263.40M |
| Operating Income | $384.70M |
| Interest Expense | $31.50M |
| Net Income | $283.50M |
| EPS (Basic) | $1.33 |
| EPS (Diluted) | $1.32 |
| Shares Outstanding (Basic) | 212.40M |
| Shares Outstanding (Diluted) | 214.90M |
Key Highlights
- 1Sales for the second quarter of 2014 increased 4% year-over-year to $2.58 billion, primarily due to energy cost pass-through.
- 2Operating income for the quarter decreased 1% to $384.7 million, and operating margin compressed by 80 basis points to 14.9%.
- 3Net income from continuing operations attributable to Air Products for the quarter was $283.5 million, a 2% decrease from the prior year, leading to diluted EPS of $1.32.
- 4The company increased its quarterly dividend by 8% to $0.77 per share, marking the 32nd consecutive year of dividend increases.
- 5For the first six months of 2014, sales grew 2% to $5.13 billion, with operating income up 1% to $770.3 million.
- 6The Electronics and Performance Materials segment demonstrated strong performance, with 8% sales growth and a 37% increase in operating income for the first six months.
- 7Air Products ended the period with $356.9 million in cash and cash items and maintained a debt-to-capitalization ratio of 43.9%.