01—Abstract
Summary
Summary of the 10-Q filed April 30, 2026. Cited figures are marked; the original filing is the authoritative source.
Air Products & Chemicals, Inc. (APD) reported a strong rebound in its financial performance for the three and six months ended March 31, 2026.
Sales increased significantly compared to the prior year, driven by higher volumes, favorable currency movements, and increased energy cost pass-throughs. The company has moved from a substantial operating loss in the prior year, largely due to significant business and asset action charges, to robust operating income and improved operating margins. This turnaround reflects operational improvements and the successful resolution of prior-year restructuring activities.
Profitability per share also saw a dramatic improvement, with both basic and diluted earnings per share significantly exceeding the prior year's loss. The company continues to manage its capital effectively, with a focus on strategic investments and returning value to shareholders through dividends. Despite some ongoing project-related costs, the overall financial health and operational execution appear positive, positioning APD for continued performance in the industrial gases sector.
02—Key points
Key Highlights
- Sales increased by 9% year-over-year for the three months ended March 31, 2026, reaching $3.2 billion, driven by volume, currency, and energy cost pass-through.
- Operating income surged to $752.7 million from a loss of $2.3 billion in the prior year, with operating margin improving to 23.7% from -79.8%, largely due to the absence of significant prior-year charges.
- Earnings per share (EPS) for the quarter was $3.19, a significant increase from a loss of $7.77 in the prior year.
- For the six months ended March 31, 2026, sales grew 7% to $6.3 billion, and operating income improved to $1.5 billion from an operating loss of $1.7 billion.
- Adjusted operating income showed a healthy increase of 19% year-over-year for the quarter, indicating strong underlying business performance.
- The company continues to invest in strategic projects, with capital expenditures totaling $1.8 billion for the first six months of fiscal year 2026, down from $2.9 billion in the prior year.
- Dividends paid to shareholders remained substantial at $797.0 million for the first six months of fiscal year 2026, reflecting a commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Air Products & Chemicals, Inc. kept $0.22.
- Revenue$3.17B100.0%
- Cost of revenue−$2.18B68.9%
- Gross profit$987.4M31.1%
- Operating costs−$234.7M7.4%
- Operating income$752.7M23.7%
- Interest, other & tax−$42.3M1.3%
- Net income$710.4M22.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed April 30, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $3.17B$2.92B | +8.8% |
| Cost of Revenue | $2.18B$2.05B | +6.4% |
| Gross Profit | $987.40M$862.30M | +14.5% |
| R&D Expenses | $21.60M$22.90M | −5.7% |
| SG&A Expenses | $227.20M$222.00M | +2.3% |
| Operating Income | $752.70M-$2.33B | +132.3% |
| Net Income | $710.40M-$1.73B | +141.0% |
| EPS (Basic) | $3.19$-7.77 | +141.1% |
| EPS (Diluted) | $3.19$-7.77 | +141.1% |
| Shares Outstanding (Basic) | 222.80M222.80M | 0.0% |
| Shares Outstanding (Diluted) | 222.90M222.80M | 0.0% |
05—Questions
Frequently Asked Questions
What drove the significant improvement in operating income this quarter compared to the prior year?
The substantial improvement in operating income from a loss of $2.3 billion to $752.7 million is primarily due to the absence of significant charges recorded in the prior year's second quarter for business and asset actions, which amounted to $2.9 billion. Excluding these charges, adjusted operating income still showed a healthy 19% increase year-over-year, driven by higher volumes, favorable currency impacts, and cost efficiencies.
How did the company's sales performance fare in the current reporting period?
Sales for the three months ended March 31, 2026, increased by 9% to $3.2 billion compared to the prior year. This growth was attributed to a 4% increase in volumes, a 4% favorable currency impact, and a 2% increase from energy cost pass-through to customers, partially offset by a 1% decrease in pricing, mainly due to lower helium prices.
What is the company's outlook on capital expenditures and investments?
Capital expenditures for the first six months of fiscal year 2026 were $1.8 billion, a decrease from $2.9 billion in the prior year, reflecting continued investment in clean energy initiatives like the NEOM Green Hydrogen Project and core industrial gas assets. The company expects total capital expenditures for fiscal year 2026 to be around $4.0 billion.
How is the company managing its debt and liquidity?
As of March 31, 2026, total debt was $17.8 billion. The company has access to committed credit facilities totaling $3.0 billion and maintains a strong liquidity position with $951.0 million in cash and cash equivalents. Debt management includes strategies to maintain a favorable mix of fixed and variable rates and access to capital markets.
06—Continue