What is the primary reason for the large net loss in the third quarter of fiscal year 2026?

The significant net loss of $1.44 billion in the third quarter of fiscal year 2026 is primarily attributable to substantial charges of $2.9 billion pre-tax related to project exit decisions. These charges included the cancellation of a clean energy complex in Louisiana and a green hydrogen production facility in Arizona, among other projects, due to unfavorable financial returns and challenging commercial conditions.

How is the company's underlying operational performance, excluding the one-time charges?

Excluding the impact of business and asset actions, the company's underlying operations remain strong. Adjusted operating income increased by 9% year-over-year in the third quarter of fiscal year 2026 to $810.3 million, and by 13% for the first nine months to $2.3 billion. Similarly, adjusted earnings per share (EPS) grew by 12% in the quarter to $3.47 and by 14% for the nine-month period to $9.84, indicating healthy performance in core business areas.

What is the outlook for capital expenditures and shareholder returns?

The company expects capital expenditures to be approximately $3.5 billion for fiscal year 2026, with continued investments in energy transition and industrial gas projects. Air Products remains committed to shareholder returns, planning to return approximately $1.6 billion to shareholders in dividends for fiscal year 2026, with a quarterly dividend of $1.81 per share, marking its 44th consecutive year of dividend increases.

What is the financial status of the NEOM Green Hydrogen Company (NGHC) joint venture?

The NGHC joint venture, a significant element of Air Products' energy transition strategy, is consolidated due to Air Products being the primary beneficiary. As of June 30, 2026, the venture had $5.5 billion in outstanding debt, primarily from non-recourse project financing. While Air Products holds a one-third ownership, substantially all activities involve or are conducted on behalf of the company. The company's financial statements reflect the assets and liabilities of NGHC, with noncontrolling interests reported. Equity affiliates' income from ventures like NGHC and others have shown substantial growth.

APD 10-Q Quarterly Report Q3 FY2026 — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-Q filed July 30, 2026. Cited figures are marked; the original filing is the authoritative source.

Air Products & Chemicals, Inc. reported a significant loss in the third quarter of fiscal year 2026, primarily driven by substantial charges related to project exit decisions, amounting to $2.9 billion^a pre-tax.

This impacted the operating income, resulting in a significant loss for the quarter. Despite this, the company's sales increased by 5%^b year-over-year, driven by higher volumes and pricing across its segments, with favorable currency movements also contributing. The nine-month period also showed an improvement in operating loss compared to the prior year, again largely due to a reduction in the magnitude of business and asset action charges, alongside operational improvements.

Excluding these significant one-time charges, the company's underlying operational performance remained resilient. Adjusted operating income and adjusted earnings per share showed year-over-year growth for both the quarter and the nine-month period, indicating strength in core operations. Management is focused on managing costs and strategic capital allocation, with a stated expectation of returning approximately $1.6 billion^c to shareholders in dividends for fiscal year 2026, demonstrating continued commitment to shareholder returns despite the reported net loss.

02—Key points

Key Highlights

Significant Q3 FY2026 net loss of $1.44 billion primarily due to $2.9 billion in pre-tax charges for project exit decisions.
Consolidated sales increased by 5% in Q3 FY2026 to $3.2 billion and by 6% for the nine months to $9.4 billion, driven by volume, pricing, and favorable currency.
Adjusted operating income increased by 9% in Q3 FY2026 to $810.3 million and by 13% for the nine months to $2.3 billion, demonstrating underlying operational strength.
Adjusted EPS grew by 12% in Q3 FY2026 to $3.47 and by 14% for the nine months to $9.84.
Equity affiliates' income saw a significant increase of 22% in Q3 FY2026 to $205.2 million and 20% for the nine months to $556.8 million.
Capital expenditures decreased to $2.6 billion for the nine months of FY2026 from $4.0 billion in the prior year, reflecting nearing completion of certain large projects.
The company expects to return approximately $1.6 billion to shareholders in dividends for fiscal year 2026, with a quarterly dividend of $1.81 per share.

03—Questions

Frequently Asked Questions

What is the primary reason for the large net loss in the third quarter of fiscal year 2026?
The significant net loss of $1.44 billion in the third quarter of fiscal year 2026 is primarily attributable to substantial charges of $2.9 billion pre-tax related to project exit decisions. These charges included the cancellation of a clean energy complex in Louisiana and a green hydrogen production facility in Arizona, among other projects, due to unfavorable financial returns and challenging commercial conditions.
How is the company's underlying operational performance, excluding the one-time charges?
Excluding the impact of business and asset actions, the company's underlying operations remain strong. Adjusted operating income increased by 9% year-over-year in the third quarter of fiscal year 2026 to $810.3 million, and by 13% for the first nine months to $2.3 billion. Similarly, adjusted earnings per share (EPS) grew by 12% in the quarter to $3.47 and by 14% for the nine-month period to $9.84, indicating healthy performance in core business areas.
What is the outlook for capital expenditures and shareholder returns?
The company expects capital expenditures to be approximately $3.5 billion for fiscal year 2026, with continued investments in energy transition and industrial gas projects. Air Products remains committed to shareholder returns, planning to return approximately $1.6 billion to shareholders in dividends for fiscal year 2026, with a quarterly dividend of $1.81 per share, marking its 44th consecutive year of dividend increases.
What is the financial status of the NEOM Green Hydrogen Company (NGHC) joint venture?
The NGHC joint venture, a significant element of Air Products' energy transition strategy, is consolidated due to Air Products being the primary beneficiary. As of June 30, 2026, the venture had $5.5 billion in outstanding debt, primarily from non-recourse project financing. While Air Products holds a one-third ownership, substantially all activities involve or are conducted on behalf of the company. The company's financial statements reflect the assets and liabilities of NGHC, with noncontrolling interests reported. Equity affiliates' income from ventures like NGHC and others have shown substantial growth.

04—Continue

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