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Air Products (APD) Q2 Earnings & Revenues Surpass Estimates

Air Products and Chemicals, Inc. APD recorded second-quarter fiscal 2023 (ending Mar 31, 2023) earnings (from continuing operations) of $1.97 per share, reflecting a fall of 17.2% from the year-ago quarter's $2.38.

APD posted adjusted earnings of $2.74 per share, up 17% from year over year. It beat the Zacks Consensus Estimate of $2.64.

Higher pricing and volumes drove the bottom line in the second quarter. However, it was offset by higher costs and adverse currency movements.

The company’s net sales in the second quarter were $3,200.1 million, which surpassed the Zacks Consensus Estimate of $3,018.3 million. Net sales increased around 8.7% from $2,945.1 million reported in the prior-year quarter.

The top line was driven primarily by higher pricing across the regions and higher volumes,  in the reported quarter.

Air Products and Chemicals, Inc. Price, Consensus and EPS Surprise

Air Products and Chemicals, Inc. price-consensus-eps-surprise-chart | Air Products and Chemicals, Inc. Quote

Segment Highlights

Revenues in the Americas segment were up 16% year over year to $1,373.1 million. The upside was driven by higher volumes and pricing, partly offset by unfavorable currency swings.

Revenues in the Europe segment rose 2% year over year to $752.9 million. The segment saw higher pricing and benefited from higher volumes, partly offset by unfavorable currency swings and lower energy cost pass-through in the second quarter.

Revenues in the Asia segment rose 8% over year to $813.9 million. The segment sales were driven by higher pricing, energy cost pass-through and increased volumes, partly offset by unfavorable currency swings.

Equity affiliates' income in the Middle East & India segment increased 39% year over year to $99 million in the reported quarter.

Financials

At the end of the second quarter, APD had cash and cash equivalents of $2,242.4 million, decreasing around 4.5% year over year. Long-term debt increased approximately 28% year over year to $8,271.9 million.

Outlook

Air Products expects full-year fiscal 2023 adjusted earnings per share of $11.30-$11.50, indicating a 10-12% year-over-year growth. For the third quarter of fiscal 2023, the company expects adjusted earnings per share in the range of $2.85-$2.95, suggesting a rise of 10-14% from the year-ago quarter.

Price Performance

Shares of APD have soared 26.7% in the past year against a 3.1% fall of the industry.

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Zacks Investment Research


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Zacks Rank & Key Picks

APD currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. STLD, Linde plc LIN and PPG Industries, Inc. PPG

Steel Dynamics currently carries a Zacks Rank #2 (Buy). Shares of STLD have gained 26.7% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Linde, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 11.9% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.8% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 21.7% over the past year.

PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 17.7% for the current year. Shares of PPG have gained 9% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.

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