John McGlade, Chairman, President and Chief Executive Officer of Air Products, believes his company is off to a good start in fiscal 2010.

Air Products has reported net income of $252m, or diluted earnings per share (EPS) of $1.16, for its fiscal first quarter ended 31st December 2009, versus $69m, and $0.32 for the fiscal first quarter of 2009.

First quarter revenues of $2,174m declined one percent as lower energy and raw material cost pass-throughs offset higher volumes and favourable currency.

Operating income of $345m was up 20% from the previous year on improved volumes in Tonnage Gases, and Electronics and Performance Materials; broad productivity gains across the company; and favourable currency impacts.

Sequentially, sales improved two percent, while operating income gained five percent.

McGlade commented, “Our earnings per share grew 20% and we continued our margin improvement putting us on track to meet our 17% goal in 2011.”

“Both our sequential and year-over-year results benefited from an improving global economy and our efforts to move Air Products to a sustainable, lower cost structure.”
Merchant Gases sales of $934m increased one percent as favorable currency was mostly offset by lower volumes.

Operating income of $190m increased 11% from the previous year, as significantly improved cost performance and favorable currency more than offset weaker volumes.

Operating margin exceeded 20%. Underlying trends continue to improve globally, as volumes were higher in Asia. Comparisons in the US and Europe continued to be difficult, due to the weak manufacturing environment in both regions.

Tonnage Gases sales of $698m were down six percent as significantly lower energy and raw material cost pass-throughs more than offset higher volumes.

Sales volumes were up due to rebounding chemical and steel production and new plant onstreams.

Operating income of $100m decreased eight percent from the previous year primarily on higher planned maintenance costs.

Electronics and Performance Materials sales of $433m increased 7 percent as higher volumes and favourable currency more than offset price declines.

Operating income of $48m increased 97% from the previous year on improved volumes and productivity.

Equipment and Energy sales of $109m were down 9 percent on lower sales activity. Operating income of $8m increased 11% from the previous year on lower development spending.

Looking ahead, McGlade said, “We believe we will see continued earnings growth throughout 2010 as the global economy, led by Asia, continues its gradual recovery, and as we drive further cost reductions. We also had a significant number of new business signings in the first quarter and are very excited by the opportunities we see for growth beyond 2010.”

Air Products is raising its guidance for fiscal 2010 to $4.75 to $4.95 per share. The company also expects second quarter EPS from continuing operations to be between $1.15 and $1.20 per share.