By Ezequiel Minaya
Air Products and Chemicals Inc. (APD) reported
better-than-expected earnings Thursday and issued strong guidance
for the current quarter, citing in part the company's recent cost
reductions.
Following the report, shares of the company rose as much as 7.4%
Thursday.
Air Products, like other companies, has faced foreign-exchange
volatility and fallout from sagging commodity prices. On Thursday,
Air Products noted the benefit from recent cost cuts, particularly
job reductions, since last year.
After becoming chief executive last year, Seifi Ghasemi launched
a sweeping restructuring that included the elimination of about
1,500 positions over the first nine months of Air Product's fiscal
year, which begins in October.
During the company's conference call Thursday, Mr. Ghasemi once
again underscored his strategy, saying that the company would
eventually see about $600 million in annual savings.
"This quarter's operating margin is the highest in more than 25
years," he said in the company release announcing the results.
Air products said it expects earnings on a per-share basis in
the current quarter of between $1.75 and $1.85, above analysts'
forecasts of $1.58. The company also raised its full-year
adjusted-earnings guidance to a range of $6.50 to $6.60 a share,
compared iwth its previous $6.35 to $6.55.
Shares of Air Products rose 4.8% to $140.54 in midday
trading.
Overall, Air Products reported a third-quarter profit of $318.8
million, or $1.47 a share, up from $314 million, or $1.46 a share
the same quarter a year ago. Excluding certain items like a pretax
charge of $59.8 million linked to restructuring costs and a pension
settlement, earnings per share came in at $1.65.
The adjusted per-share number topped Air Products's estimate of
$1.55 to $1.60--though the range was below analysts's estimates
when the company issued it.
Revenue fell 6.2% to $2.47 billion from $2.63 billion in the
same quarter in 2014. Analysts surveyed by Thomson Reuters had
called for revenue of $2.48 billion.
Americas sales in the latest quarter dipped 16% to $898 million
as lower energy prices strained the coffers of some Air Products
customers. Sales in the Europe, Middle East and Africa came in at
$455 million representing a 15% decline compared with last year,
driven mostly by unfavorable currency impacts.
Earlier this week, rival Praxair reported that profits had
slipped as it was also unable to shake the foreign-exchange
headwinds and lower commodity prices that have pressured the
industrial gas sector's top line all year.
Write to Ezequiel Minaya at Ezequiel.Minaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires