Summary
Air Products & Chemicals, Inc. (APD) reported its fourth-quarter and full-year results for fiscal 2001. The company experienced a decline in both net income and revenues for the fourth quarter compared to the prior year, primarily attributed to weakness in the global electronics market and U.S. manufacturing. Despite these challenges, APD maintained its strategic focus and implemented cost-reduction measures, including staff reductions and asset write-downs, to enhance future competitiveness. For the full fiscal year 2001, sales saw a modest increase, but income from operations and earnings per share declined. Management cited a challenging economic environment and global events as factors impacting performance, while expressing confidence in the company's long-term strategy and market positions. The outlook for fiscal year 2002 anticipates a challenging first half followed by a recovery in the second half, with projected earnings per share to be flat compared to fiscal 2001, benefiting slightly from a new accounting standard for goodwill.
Key Highlights
- 1Fourth-quarter diluted EPS of $0.60 declined 6% from the prior year's $0.64 (excluding special items), driven by a slowdown in the electronics market and U.S. manufacturing.
- 2Fourth-quarter revenues were $1.4 billion, a 6% decrease year-over-year, impacted by market conditions.
- 3Full fiscal year 2001 sales increased 5% to $5.7 billion, but operating income decreased 2% and diluted EPS was $2.37, down from $2.46 in fiscal 2000 (excluding special items).
- 4The company undertook strategic actions including divesting interests in two cogeneration facilities, restructuring businesses with targeted staff reductions, and writing down underperforming assets.
- 5The Chemicals segment's sales declined due to a divestiture and the slower economy, but operating income improved due to lower raw material costs.
- 6Industrial gas sales saw a 2% decline in the fourth quarter, with operating income down 9% due to electronics market softness.
- 7The company anticipates a challenging first half of fiscal year 2002 with earnings expected to improve in the second half, projecting flat operating earnings per share of $2.35 - $2.45 for the full year, including a 5-cent benefit from adopting a new accounting standard for goodwill.