10-QPeriod: Q1 FY2021

Air Products & Chemicals, Inc. Quarterly Report for Q1 Ended Dec 31, 2020

Filed February 4, 2021For Securities:APD

Summary

Air Products & Chemicals, Inc. (APD) reported results for the first quarter of fiscal year 2021, ending December 30, 2020. The company demonstrated resilience despite the ongoing COVID-19 pandemic, which management estimates had a negative impact of approximately $0.10-$0.15 per share. Sales increased by 5% year-over-year to $2,375.2 million, driven by favorable currency movements, pricing actions, and higher energy cost pass-throughs. However, operating income saw a slight decline of 4% to $539.1 million due to lower volumes and increased operating costs, partially offset by pricing improvements. Net income remained flat year-over-year at $486.7 million, with diluted EPS slightly decreasing by 1% to $2.12. The company highlighted strong performance in its Industrial Gases – EMEA segment with a 13% sales increase. Despite operational challenges, APD maintained its commitment to shareholders, increasing its quarterly dividend by 12% and demonstrating robust cash flow generation from operations, which increased by 16% to $774.7 million. The company continues to manage its capital effectively and maintain a strong balance sheet.

Financial Highlights

57 data points
Beta

Revenue

$2.38B

31.3% Gross Margin

Net Income

$482.00M

20.3% Net Margin

EPS (Diluted)

$2.17

Total Assets

$26.09B

Cash & Equivalents

$5.79B

Free Cash Flow

$110.50M

Financial Statements
Beta
Revenue$2.38B
Cost of Revenue$1.63B
Gross Profit$742.80M
R&D Expenses$23.50M
SG&A Expenses$202.70M
Operating Income$539.10M
Interest Expense$36.70M
Net Income$482.00M
EPS (Basic)$2.18
EPS (Diluted)$2.17
Shares Outstanding (Basic)221.50M
Shares Outstanding (Diluted)222.60M

Key Highlights

  • 1Sales grew 5% to $2,375.2 million, driven by currency, pricing, and energy cost pass-through, though volumes slightly declined.
  • 2Operating income decreased 4% to $539.1 million due to lower volumes and higher costs, partially offset by pricing actions and favorable currency.
  • 3Net income was flat at $486.7 million, and Diluted EPS slightly decreased by 1% to $2.12.
  • 4The company estimates a COVID-19 impact of approximately $0.10-$0.15 per share on its Q1 FY21 diluted EPS.
  • 5Cash provided by operating activities increased significantly by 16% to $774.7 million.
  • 6The quarterly dividend was increased by 12% to $1.50 per share, marking the 39th consecutive annual increase.
  • 7Industrial Gases – EMEA segment showed strong performance with a 13% increase in sales, driven by currency, volume, and pricing.

Frequently Asked Questions

For the first quarter of fiscal year 2021, Air Products & Chemicals reported a 5% increase in sales to $2,375.2 million. Net income remained flat at $486.7 million, while diluted EPS saw a slight decrease of 1% to $2.12. The company experienced challenges with lower volumes and higher operating costs, partly due to the ongoing COVID-19 pandemic.

The company estimates that COVID-19 had a negative impact on its Q1 FY21 diluted EPS of approximately $0.10 to $0.15 per share. This impact was seen in both sales volumes and operating costs. Management noted that while operations continued safely, future impacts remain uncertain.

Air Products & Chemicals demonstrated its commitment to shareholders by increasing its quarterly dividend by 12% to $1.50 per share. This marks the 39th consecutive year of annual dividend increases, indicating strong confidence in the company's financial health and future prospects.

The company generated strong cash flow from operations, which increased by 16% to $774.7 million in the quarter. This robust cash generation, combined with existing liquidity and access to financing, is deemed sufficient to meet its needs. Capital expenditures were elevated, driven by gasification projects, but overall liquidity remains strong.