8-KOther Events

Air Products & Chemicals, Inc. 8-K Report (Jan 22, 2002)

Filed January 22, 2002For Securities:APD

Summary

Air Products & Chemicals, Inc. (APD) reported its fourth-quarter and full-year results for the period ending September 30, 2001. The company faced a challenging economic environment, with both revenue and net income declining year-over-year. Fourth-quarter revenues were $1.4 billion, down 6%, and net income from operations was $133 million, a 5% decrease. This was primarily attributed to weakness in the global electronics market and U.S. manufacturing. In response to these conditions, Air Products implemented several strategic actions including the divestiture of interests in two cogeneration facilities, staff reductions, asset write-downs, and debt repurchases. The company also provided a cautious outlook for fiscal year 2002, anticipating flat volumes and earnings per share in the range of $2.35 to $2.45, with an estimated five cents per share benefit from the adoption of a new accounting standard for goodwill. The company expects lower earnings in the first half of fiscal 2002, with improvement in the second half as the economy rebounds.

Key Highlights

  • 1Fourth-quarter net income from operations was $133 million, or $0.60 per diluted share, a decrease of 5% and 6% respectively, compared to the prior year.
  • 2Full-year 2001 sales increased 5% to $5.7 billion, while income from operations declined 2% to $519 million, with diluted EPS of $2.37.
  • 3Revenues were impacted by a continued slowdown in the global electronics market and U.S. manufacturing, leading to a 6% revenue decline in the fourth quarter.
  • 4The company divested interests in two cogeneration facilities and took actions including staff reductions and asset write-downs to streamline operations.
  • 5Air Products repurchased a portion of its debt, taking advantage of lower interest rates.
  • 6The company anticipates flat volumes and operating earnings per share of $2.35 - $2.45 for fiscal year 2002, with earnings expected to improve in the second half of the year.
  • 7A 5-cent per share benefit is estimated for fiscal 2002 due to the adoption of a new accounting standard for goodwill.

Frequently Asked Questions

The primary drivers of the earnings decline were continued weakness in the global electronics market, which significantly impacted industrial gas sales, and a general slowdown in U.S. manufacturing.

Air Products took several steps including divesting non-core assets (cogeneration facilities), implementing a global cost reduction plan resulting in staff reductions and asset impairments, and repurchasing a portion of its outstanding debt.

The company provided a cautious outlook for fiscal year 2002, expecting flat volumes and operating earnings per share in the range of $2.35 to $2.45. Earnings are anticipated to be lower in the first half of the year and improve in the second half, contingent on an economic rebound.

The adoption of a new accounting standard for goodwill is estimated to provide a benefit of approximately five cents per share to fiscal year 2002 earnings.