There are gains for Air Products as the company announces its Q3 financial results – but sales are down 6%.

The company has announced net income of $359m, up 14% versus prior year, and diluted earnings per share (EPS) of $1.65, up 13% versus prior year for its fiscal third quarter ended June 30, 2015.

Third quarter sales of $2.470bn decreased 6% versus prior year, as underlying sales growth of 4% was offset by unfavorable currency and lower energy pass-through. Volumes increased 3%, primarily in Industrial Gases–Asia, Materials Technologies and the LNG business, and pricing was up 1%.

Operating income of $482m increased 17% versus prior year, and operating margin of 19.5% improved 380 basis points, driven by cost performance, higher pricing and higher volumes. Adjusted EBITDA of $758m increased 9% over prior year, and EBITDA margin of 30.7% improved 430 basis points, reflecting strong operating leverage.

Commenting on the quarter, Seifi Ghasemi, Chairman, President and CEO, said, “The Air Products team delivered another quarter of great results, with particular strength in our regional Industrial Gases segments, while Materials Technologies continued to improve. We again showed strong improvement in safety, and despite significant currency headwinds and stagnant economic conditions around the globe, our earnings per share were up by 13%, EBITDA margins increased to more than 30%, and this quarter’s operating margin is the highest in more than 25 years.”

“This significant improvement is a direct result of our people executing our five-point strategy. As a result, we have again increased our full year guidance to $6.50 - $6.60, which at midpoint is up 13% over last year.”

Third Quarter Results by Business Segment:

Industrial Gases – Americas sales of $898m decreased 16% versus prior year on 13% lower energy pass-through and three percent unfavorable currency. Underlying sales were flat, as higher pricing offset lower volumes. Operating income of $207m increased 9%. Operating margin of 23% improved 520 basis points over prior year, driven by cost performance, lower energy pass-through, and higher pricing. Adjusted EBITDA of $328m increased six percent, and EBITDA margin of 36.5% improved 740 basis points over prior year. Sequentially, operating income increased 13% on higher volumes and price and lower costs.

Industrial Gases – Europe, Middle East, and Africa (EMEA) sales of $455m declined 15% versus last year, driven by 16% unfavorable currency. Volumes and pricing were both up 1%. Operating income of $88m increased 2% as strong cost performance was largely offset by unfavorable currency, while record operating margin of 19.2% increased 330 basis points. Adjusted EBITDA of $147m decreased 5% versus prior year, and record EBITDA margin of 32.2% increased 350 basis points.

Industrial Gases – Asia sales of $418m increased 14% versus prior year, primarily on 11% volume growth mainly from new plants. Unfavorable currency impacts reduced sales by 3%. Operating income of $101m increased 20%, and operating margin of 24.2% improved 130 basis points over prior year due to higher volumes from the new plants and strong cost performance overcoming negative pricing. Adjusted EBITDA of $166m increased 12%. Sequentially, operating income increased 19% on strong cost performance and higher seasonal volumes.

Materials Technologies sales of $540m increased 3% over the prior year. Underlying sales were up 7% on 4% higher volume growth and 3% positive pricing, partially offset by unfavorable currency of 4%. On a constant currency basis, Electronics Materials sales were up 18% on strong volume growth and positive price. On a constant currency basis, Performance Materials sales declined two% from the prior year on softer volumes. Record operating income of $132m increased 36%, and record operating margin of 24.4% improved 600 basis points versus prior year, primarily due to higher pricing and volumes. Record adjusted EBITDA of $155m increased 27%, and record EBITDA margin of 28.6% improved 540 basis points over prior year.

Earlier in July, Air Products acquired 30.5% of the outstanding shares of Indura − an industrial gas business in Latin America−increasing its ownership position to 97.8%. The valuation was agreed at the time of initial purchase in 2012 and will be a use of cash of $278m in the company’s fiscal fourth quarter.