10-QPeriod: Q2 FY2025

Air Products & Chemicals, Inc. Quarterly Report for Q2 Ended Mar 31, 2025

Filed May 1, 2025For Securities:APD

Summary

Air Products & Chemicals, Inc. (APD) reported a significant net loss of $1.73 billion for the three months ended March 31, 2025, a stark contrast to the $572.4 million net income in the prior year. This substantial swing is largely attributable to a substantial charge of $2.9 billion related to business and asset actions, including project exits and cost reductions. Excluding these significant charges, the company's adjusted earnings per share of $2.69 for the quarter demonstrated operational resilience, though it was slightly down from $2.85 in the prior year. Despite the headline net loss, sales remained relatively stable, decreasing slightly by 0.5% to $2.92 billion, supported by higher energy cost pass-throughs and pricing, which offset volume declines. The company's liquidity remains solid, with cash provided by operating activities for the six-month period totaling $1.14 billion. Investors should note the strategic decision to exit various clean energy projects and ongoing cost reduction efforts, which are expected to yield future savings. The company also reiterated its commitment to shareholder returns, planning to return approximately $1.6 billion to shareholders in 2025 through dividends and share repurchases.

Financial Highlights

54 data points
Beta

Revenue

$2.92B

29.6% Gross Margin

Net Income

-$1.73B

-59.3% Net Margin

EPS (Diluted)

$-7.77

Total Assets

$38.87B

Cash & Equivalents

$1.49B

Free Cash Flow

-$1.56B

Financial Statements
Beta
Revenue$2.92B
Cost of Revenue$2.05B
Gross Profit$862.30M
R&D Expenses$22.90M
SG&A Expenses$222.00M
Operating Income-$2.33B
Net Income-$1.73B
EPS (Basic)$-7.77
EPS (Diluted)$-7.77
Shares Outstanding (Basic)222.80M
Shares Outstanding (Diluted)222.80M

Key Highlights

  • 1Reported a net loss of $1.73 billion for the three months ended March 31, 2025, largely due to a $2.9 billion charge for business and asset actions.
  • 2Adjusted earnings per share (non-GAAP) of $2.69 for the quarter, down from $2.85 in the prior year, indicating operational performance despite significant charges.
  • 3Sales remained flat year-over-year at $2.92 billion, driven by higher energy cost pass-throughs and pricing, which offset lower volumes.
  • 4Cash provided by operating activities for the six months ended March 31, 2025, was $1.14 billion, demonstrating continued operational cash generation.
  • 5The company is undertaking strategic project exits and cost reduction plans, expecting annual pre-tax savings of $185-195 million.
  • 6The Board of Directors declared a quarterly dividend of $1.79 per share, an increase, and expects to return approximately $1.6 billion to shareholders in 2025.
  • 7The NEOM Green Hydrogen Project financing remains on track, with the joint venture having borrowed $4.3 billion as of March 31, 2025.

Frequently Asked Questions

The primary driver of the substantial net loss of $1.73 billion for the three months ended March 31, 2025, is a significant charge of $2.9 billion related to business and asset actions, which includes project exit costs and global cost reduction initiatives. This charge significantly impacted the reported net income.

Sales for the quarter were $2.92 billion, flat compared to the prior year. This stability was achieved through higher energy cost pass-throughs to customers (4%) and a modest increase in pricing (1%), which compensated for lower volumes (3%) and an unfavorable currency impact (2%). Lower volumes were partly due to the divestiture of the LNG business and decreased global helium demand.

Air Products remains committed to returning capital to shareholders. The company plans to return approximately $1.6 billion to shareholders in 2025. They recently increased their quarterly dividend by $0.02 per share to $1.79 per share, marking the 43rd consecutive year of dividend increases, and expect to continue this trend.

The NEOM Green Hydrogen Project is progressing, with the joint venture having drawn $4.3 billion on its non-recourse project financing as of March 31, 2025. This project is a significant part of Air Products' strategy in the Middle East and India segment.