Air Products & Chemicals, Inc. Quarterly Report for Q3 Ended Jun 30, 2022

Summary

Air Products & Chemicals, Inc. (APD) reported strong revenue growth in the third quarter of fiscal year 2022, with sales increasing by 22% year-over-year to $3.19 billion. This growth was driven by a combination of higher energy cost pass-throughs, positive pricing actions, and increased volumes across various segments. The company also saw a significant increase in equity affiliates' income, largely due to the Jazan Integrated Gasification and Power Company (JIGPC) joint venture. Despite the robust top-line performance, operating income saw a more modest increase of 9%, with operating margins declining due to the impact of higher energy cost pass-throughs which increase sales but not operating income, alongside inflationary pressures and supply chain challenges. Net income increased by 10% to $587.1 million, resulting in diluted EPS of $2.62. The company also highlighted its commitment to shareholder returns by increasing its quarterly dividend for the 40th consecutive year.

Key Highlights

• 1Sales grew 22% year-over-year to $3.19 billion, driven by energy cost pass-through, pricing, and volume increases.
• 2Operating income increased 9% to $627.4 million, though operating margin decreased due to higher energy cost pass-through and other inflationary factors.
• 3Net income attributable to Air Products rose 10% to $582.1 million ($2.62 diluted EPS).
• 4Equity affiliates' income significantly increased by 84% to $116.1 million, primarily due to the JIGPC joint venture.
• 5The company increased its quarterly dividend by 8% to $1.62 per share, marking the 40th consecutive year of dividend increases.
• 6Capital expenditures were substantial at $3.86 billion for the first nine months, primarily driven by investments in joint ventures.
• 7Cash provided by operating activities was $2.21 billion for the first nine months of the fiscal year.

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