Air Products reported a net income of $167 million for its first fiscal quarter ending December 31, 2004.

The company's net income was up 27 percent and diluted EPS had increased 24 percent on the previous year.

The revenues from the quarter were up a record 18 percent from the previous year, representing $1,991 million dollar revenues. The increase was mainly due to strong volumes across the Gases and Chemical businesses. Strong volume increases across all businesses, a favourable currency and productivity gains were offset by higher raw material costs and productivity schemes.

Air Products and CEO John P Jones ///Photo courtesy of Air Products

Air Products and CEO John P Jones said,We again delivered strong earnings on solid volume gains and generated robust cash flow in the quarter. The strength of our portfolio, particularly our leadership positions in our growth businesses, is producing higher earnings and improved returns. Our employees remain focused and continue to make good progress toward our number one priority-improving our return on capital.\\$quot;

Gas sales increased 20 percent to $1,443 million over the prior year. The increase is said to come from higher volumes, especially in the hydrogen refinery and electronics area. Operating income and increased by 21 percent to $220 million, again due to strong volumes and a favourable currency.

Air Products Chemicals segment had first quarter sales of $461 million, an increase of 12 percent on the previous year. Strong volumes in performance materials and Intermediate chemicals were the main reasons for the increase. Operating income decreased by 18 percent on last year. The reduced income to $20 million was due to high raw material costs and plant operating costs associated with plant turnarounds.

The equipment sector created revenues of $88 million, up 12 percent on the previous year. The hike in revenue was from the sales of liquefied natural gas (LNG) heat exchangers. Operating income showed a significant rise to $6 million. The order of two AP-X LNG heat exchangers was a considerable influence on these increases.

Looking to Air Products future performance, Mr Jones added, \\$quot;With our relentless focus on shareholder value, we continue to load our existing asset base while delivering a step change in our productivity and maintaining strict capital discipline. Although our Chemicals group results this quarter are unacceptable, we expect significant improvement in the second quarter and throughout the remainder of our fiscal year. Our first quarter typically is the seasonal low point, and we now have some raw material fixes in place and several announced price increases which should help drive sequential improvement in Chemicals.\\$quot;

\\$quot;Based on our improved first quarter performance and our confidence in our ability to sustain it, we are increasing our fiscal 2005 EPS guidance range to $2.95 to $3.15. For the fiscal second quarter, we expect to grow between 18 and 26 percent, resulting in an EPS of $.73 to $.78.\\$quot;