Air Products' Earnings and Revenues Lag Estimates in Q2

Air Products and Chemicals, Inc. APD logged a second-quarter fiscal 2025 (ended March 31, 2025) loss of $7.77 per share. This compares unfavorably with earnings of $2.57 per share recorded in the year-ago quarter. 

Barring one-time items, adjusted earnings per share were $2.69, missing the Zacks Consensus Estimate of $2.84. Adjusted earnings fell 6% from the prior-year quarter due to lower volumes and higher costs, partly offset by favorable pricing.

The industrial gases giant reported revenues of $2,916.2 million, which was about 0.5% lower than the same period last year. This figure fell short of the Zacks Consensus Estimate of $2,950.1 million. 

The flat sales resulted from 4% higher energy costs pass-through and 1% higher pricing, offset by 3% lower volumes from the LNG divestiture and 2% unfavorable currency.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

APD’s Segment Highlights

Revenues in the Americas segment rose 3.3% from the previous-year quarter to $1,287.2 million, missing the consensus estimate of $1,350 million. 

The operating income of $366 million declined 2% due to higher expenses from planned maintenance, partly offset by a favorable one-time customer contract amendment and non-helium pricing. 

In the Europe segment, revenues rose 8.9% year over year to $727.4 million, beating the consensus estimate of $686 million. Operating income declined 3% to $196 million due to higher costs, negative business mix and currency. However, higher pricing, excluding power and fuel costs, somewhat offset the loss.

Revenues in the Asia segment declined 0.7% from the prior-year quarter to $774.1 million,  falling short of the consensus estimate of $782 million. Operating income of $191 million declined 6% due to reduced helium pricing, net of power and fuel expenses and currency, slightly offset by cost reductions.

APD’s Financials

Air Products ended the quarter with cash and cash items of $1,491.4 million, down about 19% from the prior quarter. Long-term debt was up around 7.5% sequentially to $14,153.1 million.

APD’s Outlook

Air Products has revised its full-year fiscal 2025 adjusted EPS outlook to the band of $11.85 to $12.15. Air Products expects adjusted EPS to be between $2.90 and $3.00 for the third quarter of fiscal 2025.
 
Air Products anticipates roughly $5 billion in capital expenditures for fiscal 2025.

APD’s Price Performance

The company’s shares have gained 14.1% in the past year compared with a 24.7% decline in the industry.

APD’s Zacks Rank & Key Picks

APD currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth a look in the basic materials space include Hawkins, Inc. HWKN, SSR Mining Inc. SSRM and Intrepid Potash, Inc. IPI. While HWKN carries a Zacks Rank #1 (Strong Buy), SSRM and IPI carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hawkins is expected to report fiscal fourth-quarter results on May 21. The consensus estimate for Hawkins’ earnings is pegged at 74 cents. HWKN beat the consensus estimate in one of the last four quarters while missing thrice, with the average earnings surprise being 6.1%. 

SSRM is scheduled to release first-quarter results on May 6. The Zacks Consensus Estimate for SSRM’s first-quarter earnings is pegged at 8 cents. SSRM has a trailing four-quarter earnings surprise of 155.7%, on average.  

Intrepid Potash is slated to release first-quarter results on May 5. The consensus estimate for IPI’s first-quarter loss is 12 cents, stable over the past 60 days.

 

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This article originally published on Zacks Investment Research (zacks.com).

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