APD Air Products and Chemicals Inc

By Austen Hufford

Air Products & Chemicals Inc. swung to a write-down driven loss for the quarter and posted a sales decline Thursday, but also raised its adjusted profit outlook for the year.

Chief executive Seifi Ghasemi cited, "challenging economic conditions and a weak manufacturing environment."

Air Products upped its yearly profit forecast, now expecting $7.40 to $7.55 in adjusted earnings per share, up from the $7.25 to $7.50 it expected previously. For the current quarter, Air Products expects adjusted per-share earnings of between $1.87 and $1.92. Analysts polled by Thomson Reuters had expected earnings per share of $1.90.

Earlier this month, Air Products said it would be shutting down its troubled energy-from-waste business after it couldn't efficiently resolve operational and design challenges. Air Products couldn't figure out how to efficiently solve problems with the technologically advanced project. During the quarter, Air Products took a $945.7 million charge related to the closure.

The company swung to a loss of $473.3 million, or $2.17 a share, from a profit of $290 million, or $1.33 a year prior. Excluding the write-down from the energy-from-waste business and other charges , per-share earnings from continuing operations increased to $1.82 from $1.56.

Revenue declined 5.9% to $2.27 billion, as the company faced currency headwinds and lower energy pass-through. Volumes were unchanged, the company said.

Analysts had expected adjusted earnings per share of $1.81 on revenue of $2.37 billion.

The company's cost of sales fell at a steeper pace than revenue, decreasing 11% to $1.52 billion, as its selling and administrative expenses decreased 14%. Operating margin for the quarter increased to 22.6% from 15.6% during the same period last year.

Industrial gas sales decreased by 10% in the Americas and by 6.4% in the Europe, Middle East and Africa region. In Asia, sales climbed 3.4%. Sales in the company's materials segment fell 7.3% to $494.3 million.

The company said it intends to spin-off its materials technologies business, to be known as Versum Materials, and is currently "assessing market conditions to determine favorability for a spin-off."

Shares, up 25% in the last three months, were inactive in premarket trading.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

April 28, 2016 07:46 ET (11:46 GMT)

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