Air Products today reported net income of $204m or diluted earnings per share (EPS) of $.89 for its second fiscal quarter ended 31 March 2006.
Net income increased 16 per cent and diluted EPS was up 19 per cent compared with the prior year.
Second quarter earnings comparisons are affected by the adoption of Statement of Financial Accounting Standards No. 123R and expensing of stock options as of 1 October 2005. On a comparable basis (including stock compensation expenses), net income increased 21 per cent and diluted EPS increased 24 percent.
Revenues of $2,317m were up 16 per cent over the prior year on strong volume growth in gases and equipment. Operating income of $295m was up 22 per cent from the prior year, primarily on improved results in all segments driven by strong sales in gases and equipment and improved pricing in chemicals.
John P. Jones, chairman and chief executive officer, said: 'Strong growth in the second quarter again delivered a double digit earnings increase and improved return on capital. During the quarter, we announced repositioning plans for our Chemicals Group.
'Consistent with those plans, we completed the sale of our Geismar Polyurethane Intermediates facility and the acquisition of Tomah3 Products to strengthen our Performance Materials growth platform. Actions like these, coupled with our improving performance, are transforming Air Products to a higher growth, less cyclical and more focused company.'
Gases segment sales of $1,644m were up 16 per cent over the prior year on higher volumes in electronics, EPI and global merchant gases. Operating income of $229m increased 15 per cent from the prior year on strong volumes, particularly in electronics, improved pricing in North America, and gains from hurricane insurance recovery.
The net hurricane impact was positive to operating income in the quarter by $15m or $.04 per share. These improvements were partially offset by higher costs associated with the start-up of the new United Kingdom Home Oxygen Service contract and flat sales and higher costs in the US homecare business.
Looking forward, Mr. Jones said: 'We have seen strong volume growth in the first half of 2006 and are encouraged by the momentum we see in our businesses. With a great backlog of projects driving top-line growth, continued loading of our asset base, and improved productivity and aggressive cost management, we are well on our way to delivering our fourth consecutive year of double digit top-line growth while meeting our commitment to improve our return on capital.'
For the third quarter, the company expects earnings per share between $.88 and $.92. For the full year the company raised its earning guidance to a range of $3.40 to $3.50 per share.