Air Products Reports Record Sales and Earnings in Q4 and Fiscal 2007; Achieves $10 Billion in Sales and $1 Billion in Net Income for the Year
Access the Q4 earnings teleconference scheduled for 10:00 a.m. Eastern Daylight Time on October 24 by calling (719) 325-4748 and entering passcode 1225804, or listen on the Web at:
Air Products today reported record net income of $293 million, or diluted EPS of $1.31, for its fiscal 2007 fourth quarter versus $128 million and $0.57, respectively, for the fourth quarter of fiscal 2006.
For fiscal 2007, sales of $10,038 million were up 15 percent, net income of $1,036 million was up 43 percent, and EPS of $4.64 was up 46 percent over the prior year.
The results for the fourth quarter for both fiscal 2007 and 2006 contained a number of items.
Fiscal 2007 fourth quarter results included a loss for discontinued operations related to the pending sale of the company’s High Purity Process Chemicals business announced today, a gain on a polyurethane intermediates contract settlement, a tax benefit on the charitable donation and gain on sale of an investment, a charge for a supplemental pension plan, a charge for a global cost reduction plan, and a tax benefit from audit settlements and adjustments.
Fiscal 2006 fourth quarter results included a loss reported in discontinued operations related to the sale of the company’s amines business, a charge for a global cost reduction plan, and a charge for the cumulative effect of an accounting change.
The following discussion of fourth quarter and full year results in this release removes these items and is based on non-GAAP comparisons. A reconciliation can be found at the end of this release.
For the fourth quarter, adjusted income from continuing operations was $262 million and adjusted diluted EPS from continuing operations was $1.17, reflecting a 26 percent increase over the prior year.
Record fourth quarter revenues of $2,603 million were up 12 percent from the prior year on higher pricing and volumes in the Merchant Gases segment, and higher volumes in the Tonnage Gases and Electronics and Performance Materials segments. Operating income of $371 million was up 22 percent.
For fiscal 2007, sales of $10,038 million were up 15 percent and income of $976 million was up 23 percent over the prior year due to higher volumes broadly across the Merchant Gases, Tonnage Gases, Electronics and Performance Materials, and Energy and Equipment segments.
Operating income of $1,390 million increased 23 percent. Diluted EPS of $4.37 was up 25 percent.
John McGlade, president and chief executive officer, said, “We had strong operating performance in our fiscal 2007 fourth quarter, closing out our fourth consecutive year of double-digit sales and earnings growth. Most importantly, we significantly improved our return on capital, reaching our goal of 12.5 percent ORONA and hitting the milestone of $10 billion in sales and $1 billion in net income. Our employees’ focus on becoming a higher growth, higher return company delivered these outstanding results.”
Fourth Quarter Segment Performance
* Merchant Gases sales of $855 million were up 18 percent and operating income of $155 million increased 20 percent over the prior year on improved pricing in all geographies and continued volume growth, particularly in Asia. Operating income in the prior year included hurricane insurance recoveries.
* Tonnage Gases sales of $690 million were up 12 percent and operating income of $105 million increased one percent over the prior year on higher volumes from refinery hydrogen investments and improved plant loadings, partially offset by higher maintenance costs and prior year hurricane insurance recoveries.
* Electronics and Performance Materials sales of $523 million were up five percent and operating income of $61 million was up two percent over the prior year on improved volumes. Electronics sales were driven by higher specialty materials volumes, while Performance Materials sales increased from volume growth across most product lines.
* Equipment and Energy sales of $124 million were down four percent and operating income of $18 million decreased nine percent over the prior year, reflecting the expected lower liquefied natural gas heat exchanger activity from prior peak periods.
* Healthcare sales of $160 million were up seven percent and operating income of $9 million increased over the prior year on volume growth and lower costs in Europe and a prior year inventory adjustment.
* Chemicals sales of $252 million were up 13 percent and operating income of $29 million increased 96 percent on higher polymers and polyurethane intermediates volumes.
Looking forward, McGlade said, “We are targeting our fifth consecutive year of double-digit earnings growth in fiscal 2008 based on a strong project workload around the world and continued growth in global manufacturing. We are positioned in the right markets and geographies to deliver above-average growth into the future.
“We are also maintaining our commitment to improve returns. This year, we will work to expand our margins and continue to reduce costs across all of our businesses, with the goal of driving a 100 basis point margin improvement in fiscal 2008 and a 300 basis point increase over the next three years.”
The company currently anticipates fiscal year 2008 EPS in the range of $4.80 to $5.00 per share, representing year-over-year earnings growth on a continuing operations basis of 10 to 14 percent. For the first quarter of fiscal 2008 ending December 31, 2007, EPS is expected to be between $1.08 and $1.13.
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.