LEHIGH VALLEY, Pa. - Air Products (NYSE: NYSE:APD) shares edged up 1.1% as the company reported mixed second-quarter results but maintained its full-year earnings guidance.
The industrial gas giant posted adjusted earnings per share (EPS) of $2.85, surpassing the analyst consensus of $2.70. However, revenue fell short of expectations at $2.93 billion, compared to the anticipated $3.05 billion.
Compared to the same quarter last year, the company's GAAP EPS saw a significant 30% increase, while adjusted EPS rose by 4%. Despite the revenue dip of 8% from the prior year, due to lower energy cost pass-through and volume declines, the company's focus on pricing and cost reduction strategies paid off, as reflected in the improved margins.
Seifi Ghasemi, Chairman, President, and CEO of Air Products, commented on the performance, "Focused on pricing and reducing our costs, we delivered in the second quarter of fiscal year 2024 despite the challenging economic and geopolitical circumstances. Our adjusted earnings per share of $2.85 exceeded the high end of our guidance for the quarter."
For the next quarter, Air Products forecasts adjusted EPS to be between $3.00 and $3.05, which is below the analyst consensus of $3.30. Nonetheless, the company reaffirms its full-year fiscal 2024 adjusted EPS guidance of $12.20 to $12.50, aligning with the midpoint of the analyst estimate of $12.31.
The company's performance was driven by higher pricing and lower costs, which helped offset the impact of lower volumes and equity affiliates' income. The Americas segment saw a 15% increase in operating income and adjusted EBITDA, primarily due to higher pricing and volumes. In contrast, Asia's operating income fell by 13%, and adjusted EBITDA decreased by 6%, mainly due to volume declines and unfavorable currency effects.
Air Products continues to focus on its strategic portfolio of low- and zero-carbon hydrogen projects globally, reinforcing its position as a leader in the energy transition. The company's capital expenditure forecast remains unchanged at $5.0 billion to $5.5 billion for the full fiscal year 2024.
Investors appear cautiously optimistic as the stock saw a modest uptick following the earnings release, indicating a measured response to the mixed results.
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