Air Products & Chemicals Inc. reported better-than-expected
earnings and issued strong guidance for the current quarter, citing
in part the company's recent cost cuts.
Following the report Thursday, shares of the company rose as
much as 7.4%.
Air Products, like other companies, has faced foreign-exchange
volatility and fallout from sagging commodity prices. Thursday, Air
Products noted the benefit from recent cost cuts, particularly job
reductions, since last year.
After becoming chief executive in June 2014, Seifi Ghasemi
launched a sweeping restructuring that included the elimination of
about 1,500 positions over the first nine months of the company's
fiscal year, which began in October.
On a Thursday conference call, Mr. Ghasemi once again
underscored his strategy, saying that the company eventually would
see about $600 million in annual savings.
"This quarter's operating margin is the highest in more than 25
years," he said in the earnings release.
Air Products said it expects fourth-quarter earnings per share
of $1.75 to $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 from its previous $6.35 to $6.55.
The company also named corporate lawyer Charles Cogut, a notable
mergers and acquisitions lawyer at Simpson Thacher & Bartlett
LLP, to its board Thursday, which may have piqued the interest of
investors and stirred speculation of a deal. Management has waved
off talk of a major acquisition.
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,
a year earlier. Excluding certain items such as 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 figure 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 fell 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, driven mostly by
unfavorable currency impacts.
Earlier this week, rival Praxair Inc. reported that profits had
slipped as it also was 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
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