Air Products Reports Fiscal 2009 First Quarter Earnings
LEHIGH VALLEY, Pa. – Air Products (NYSE:APD) today reported net income of $69 million or diluted earnings per share (EPS) of $0.32 for its fiscal first quarter ended December 31, 2008. This includes a $0.55 per share charge for the previously announced global cost reduction plan and a $0.10 per share loss from discontinued operations.
Excluding the impact of these items, income was $206 million and diluted EPS was $0.97, down 21 and 18 percent, respectively, compared with the prior year. The discussion of first quarter results in this release is based on non-GAAP comparisons. It excludes the impacts of the above items. A reconciliation can be found at the end of this release.*
First quarter revenues of $2,195 million declined nine percent and operating income of $288 million was down 24 percent from the prior year on weaker volumes, primarily in the Electronics and Performance Materials and Merchant Gases segments, and unfavorable currency.
John McGlade, chairman, president and chief executive officer, said, “Over the quarter, we saw further deterioration in business conditions, resulting in one of the weakest economic environments we’ve ever seen. It was evident that the shocks to the global economy have shattered consumer confidence, which has significantly impacted customers’ operating rates across most of our end markets. In response, we continue to take aggressive actions to reduce our costs and drive to a lower cost structure.”
First Quarter Segment Performance
* Merchant Gases sales of $925 million declined eight percent due to currency. Operating income of $171 million declined 15 percent from the prior year, as strong pricing was offset by weaker volumes across all regions and unfavorable currency impacts.
* Tonnage Gases sales of $744 million were down six percent and operating income of $109 million decreased two percent from the prior year on unfavorable currency impacts and lower volumes from weakness in steel and chemicals end markets. Hydrogen volumes were higher despite unfavorable hurricane impacts.
* Electronics and Performance Materials sales of $407 million declined 21 percent. Operating income of $25 million declined 63 percent from the prior year. Electronics manufacturing declined significantly on falling consumer demand. Performance Materials volumes dropped on lower demand from coatings, autos, housing and other end markets.
* Equipment and Energy sales of $120 million were up 19 percent on higher air separation unit sales. Operating income of $7 million decreased 25 percent from the prior year on lower LNG heat exchanger activity.
McGlade said, “While the global economic environment is poor, we continue to build and maintain our strong positions, taking the necessary near-term actions to deliver improvement and growth in the future. We have a good backlog of projects and opportunities in front of us. Our solid balance sheet and access to capital will enable us to take advantage of these opportunities.”
The company expects second quarter EPS from continuing operations to be between $0.80 to $0.90 per share and full year EPS from continuing operations to be between $4.00 and $4.30 per share.
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