Summary
Air Products & Chemicals, Inc. (APD) reported its results for the quarter and nine months ended June 29, 2016. The company saw a modest decrease in sales for the quarter, primarily due to lower energy cost pass-through and unfavorable currency movements, although higher volumes provided some offset. Despite the sales dip, operating income and margin significantly improved, driven by strong cost performance and operational efficiencies. This profitability improvement extended to Adjusted EBITDA and diluted earnings per share on both GAAP and non-GAAP bases. The company is actively managing its portfolio, having entered into an agreement to sell its Performance Materials division and planning to spin off its Electronic Materials division as Versum Materials. Additionally, APD announced its exit from the Energy-from-Waste business, which resulted in a substantial loss recorded in discontinued operations for the nine-month period. Management is focused on its core Industrial Gases business and has demonstrated a commitment to shareholder returns through a 6% increase in its quarterly dividend, marking its 34th consecutive annual increase.
Financial Highlights
54 data points| Revenue | $1.91B |
| Cost of Revenue | $1.32B |
| Gross Profit | $594.30M |
| R&D Expenses | $18.70M |
| SG&A Expenses | $168.40M |
| Operating Income | $394.60M |
| Interest Expense | $35.10M |
| Net Income | $346.80M |
| EPS (Basic) | $1.60 |
| EPS (Diluted) | $1.59 |
| Shares Outstanding (Basic) | 216.60M |
| Shares Outstanding (Diluted) | 218.50M |
Key Highlights
- 1Sales for the three months ended June 29, 2016, decreased by 1% to $2,434.4 million compared to $2,470.2 million in the prior year period.
- 2Operating income for the quarter increased by 26% to $535.1 million, and the operating margin expanded significantly by 480 basis points to 22.0%, driven by favorable cost performance.
- 3Diluted earnings per share (EPS) from continuing operations were $1.63 for the quarter, an increase of 10% compared to $1.48 in the prior year.
- 4The company announced a definitive agreement to sell its Performance Materials division for $3.8 billion and plans to spin off its Electronic Materials division (Versum Materials).
- 5Air Products committed to exiting its Energy-from-Waste (EfW) business, leading to a loss of $876.2 million from discontinued operations for the nine months ended June 29, 2016.
- 6The quarterly dividend was increased by 6% to $0.86 per share, continuing a 34-year streak of annual dividend increases.
- 7Cash provided by operating activities for the nine months ended June 29, 2016, was $1,834.3 million.