What was the primary driver for the significant increase in sales?

The primary driver for the 26% increase in sales to $2,994.2 million was a combination of higher energy and natural gas cost pass-through to customers (14%), increased volumes (8%), and positive pricing actions (5%). The on-site business, which allows for cost pass-through, was particularly impactful.

Why did operating income decrease despite higher sales?

Operating income decreased by 3% to $523.0 million despite higher sales primarily due to significantly increased energy and natural gas costs, as well as supply chain disruptions. While pricing actions helped to mitigate some of these increased costs, they did not fully offset the higher expenses, leading to a decrease in operating margin.

How did the JIGPC joint venture impact the financial results?

The Jazan Integrated Gasification and Power Company (JIGPC) joint venture had a substantial positive impact, primarily driving the 113% increase in equity affiliates' income to $147.8 million. This contributed significantly to the overall increase in net income and diluted EPS for the quarter.

What is the outlook for capital expenditures?

Air Products expects capital expenditures for fiscal year 2022 to be approximately $4.5 to $5 billion. A significant portion of this is related to ongoing investments in large projects, including the JIGPC joint venture.

APD 10-Q Quarterly Report Q1 FY2022 — Revenue, Net Income, EPS

Summary

Air Products & Chemicals, Inc. (APD) reported strong sales growth in the first quarter of fiscal year 2022, driven by increased volumes and robust price increases, particularly in Europe, which benefited from energy cost pass-through mechanisms. Despite a significant increase in sales, operating income saw a slight decrease due to escalating energy and natural gas costs, which outpaced partial recovery through pricing actions and supply chain challenges. A substantial increase in equity affiliates' income, largely due to the Jazan Integrated Gasification and Power Company (JIGPC) joint venture, significantly boosted net income and diluted EPS, offsetting some of the pressure on operating margins. The company continued its commitment to shareholder returns through consistent dividend payments and maintained a strong balance sheet with manageable debt levels and ample liquidity.

Financial Highlights

57 data points

Beta

Revenue

$2.99B

0.3% Gross Margin

Net Income

$560.40M

0.2% Net Margin

EPS (Diluted)

$2.52

Total Assets

$27.13B

Cash & Equivalents

$2.95B

Free Cash Flow

$121.40M

Financial Statements

Beta

Revenue	$2.99B
Cost of Revenue	$2.22B
Gross Profit	$770.60M
R&D Expenses	$23.30M
SG&A Expenses	$232.80M
Operating Income	$523.00M
Interest Expense	$30.50M
Net Income	$560.40M
EPS (Basic)	$2.53
EPS (Diluted)	$2.52
Shares Outstanding (Basic)	221.90M
Shares Outstanding (Diluted)	222.60M

Key Highlights

1Sales increased by 26% to $2,994.2 million, driven by higher energy/natural gas cost pass-through, volumes, and pricing.
2Operating income decreased by 3% to $523.0 million due to higher energy costs and supply chain disruptions, partially offset by pricing actions.
3Equity affiliates' income surged by 113% to $147.8 million, significantly boosted by the JIGPC joint venture.
4Net income attributable to Air Products rose by 13% to $560.4 million.
5Diluted EPS increased by 19% to $2.52, benefiting from higher equity affiliate income.
6The company declared a quarterly dividend of $1.62 per share, an 8% increase, marking the 40th consecutive year of dividend increases.
7Capital expenditures were $2,331.1 million, significantly driven by the investment in the JIGPC joint venture.

Air Products & Chemicals, Inc. Quarterly Report for Q1 Ended Dec 31, 2021

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions