Air Products has today announced its Q1 fiscal 2020 results, including GAAP net income of $489m and GAAP diluted earnings per share (EPS) of $2.14.

GAAP diluted EPS was up 36% and GAAP net income was up 37%, primarily driven by higher pricing and volumes in all three regions as well as prior year costs related to tax reform adjustments and a facility closure. 

First quarter sales of $2.3bn increased 1% versus prior year on 6% volume growth and 3% higher pricing, partially offset by 5% lower energy pass-through; 1% unfavourable currency; and 2% from a contract modification to a tolling agreement in India, which impacts sales.

Volume growth was primarily driven by base business growth, new plants, acquisitions and a short-term contract in Asia.

Commenting on the results, Seifi Ghasemi, Chairman, President and CEO, said, “I want to thank our talented Air Products team for delivering another set of strong results for the quarter.”

“Our excellent financial position allows us to invest capital strategically, and this quarter we announced our largest-ever US investment to supply Gulf Coast Ammonia in Texas.”

Air Products to make largest-ever US investment of $500m

“Meanwhile, we continue to return cash to our shareholders, announcing an 18-cent, or more than 15%, dividend increase that marks our 38th consecutive year of dividend increases.”

Air Products makes largest ever dividend increase

Results by business segment

Industrial Gases – Americas sales of $936m decreased 5%, as 3% higher pricing and 1% higher volumes were more than offset by 8% lower energy pass-through and 1% unfavourable currency. Operating income of $257m increased 17%, primarily driven by higher pricing, and operating margin of 27.5% increased 530 basis points. Adjusted EBITDA of $410m increased 11%, primarily driven by higher pricing, and adjusted EBITDA margin of 43.8% increased 670 basis points.

Industrial Gases – EMEA sales of $499m decreased 5%. Volumes increased 6% and higher pricing contributed 3%. These results were more than offset by 4% lower energy pass-through, 2% unfavourable currently, an 8% decrease from the India contact modification. Operating income of $121m increased 14%, primarily driven by higher pricing, and operating margin of 24.2% increased 410 basis points. Adjusted EBITDA of $188m increased 14%, primarily driven by higher pricing, and adjusted EBITDA margin of 37.7% increased 610 basis points.

Industrial Gases – Asia sales of $693m increased 11%. Volumes increased 9%, driven by new plants, base business growth and a short-term contract. Pricing increased 4% while currency has a negative 2% impact. Operating income of $229m increased 13% on improved volumes and pricing, and operating margin of 33% increased 80 basis points. Adjusted EBITDA of $247m increased 16% on improved volumes and pricing, and adjusted EBITDA margin of 50.1% increased 260 basis points.


“The Air Products team remains focused on productivity, creating our own growth opportunities and delivering shareholder value. As we look ahead, we see significant opportunities to provide sustainable solutions for the world to meet its energy and productivity needs, and we are working hard to be at the heard of those opportunities,” Ghasemi continued.

Air Products is maintaining full-year fiscal 2020 adjusted EPS guidance of $9.35 to $9.60 per share, up 14% to 17% over prior year. For the fiscal 2020 Q2, Air Products’ adjusted EPS guidance is $2.10 to $2.20 per share, up 9-15% over fiscal 2019 Q2 adjusted EPS.

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