Air Products has reported strong fiscal quarter three results (Q3) sales with net income from continuing operation of $488m and GAAP diluted EPS from continuing operations of $2.20 for its fiscal Q3 ended 30th June (2019).

The results include several disclosed items which total to a $0.03 EPS benefit.

For the quarter, a non-GAAP basis, quarterly adjusted net income from continuing operations of $481m and record adjusted diluted EPS from continuing operations of $2.17 increased 12% and 11%, respectively over the prior year.

Record adjusted EBITDA of $892m increased 9% over the prior year. Adjusted EBITDA increased 8% on strong performance in all regions, particularly driven by the Lunar New Year recovery in Asia.

“The committed team at Air Products continues to execute on our well-defined short- and long-term strategy,” said Seifi Ghasemi, Chairman, President and CEO of Air Products.

“Our adjusted EPS of $2.17 was the highest ever and 11% higher than last year. Our adjusted EBITDA margin of 40% wad also a record high and 1,500 basis points higher than five years ago when we set out goal to be the best industrial gas company in the world.”

“I want to thank all of our employees around the world who work hard every day to deliver these results.”

Results by region

Industrial Gases – Americas sales of $955m increased 1% over the prior year, as 4% higher pricing was partially offset by 2% unfavourable currency and 1% lower energy pass-through.

Underlying volumes grew 1% but were offset by a contact termination that occurred in Q3 2018. Record adjusted EBITDA of $410m increased 7% and adjusted EBITDA margin of 42.9% increased 270 basis points from the prior year, primarily driven by higher pricing.

Industrial Gases – EMA sales of $495m decreased 12% from the prior year. Strong pricing contributed 4%, and volumes increased 2% over the prior year. These results were offset by 5% unfavourable currency, 2% lower energy pass-through, and an 11% decrease from the India contract modification.

Adjusted EBITDA of $190m increased 2% over the prior year; on a constant currency basis, adjusted EBITDA increased 7%. Adjusted EITDA margin of 38.4% increased 520 basis points over the prior year; excluding the impact of the India contract modification, adjusted EBITDA margin was up approximately 100 basis points.

Industrial Gases – Asia sales of $679m increased 9% over the prior year. Volumes increased 10%, driven primarily by new projects, mainly the Lu’An gasification project. Pricing increased 5%, with strength across all major product lines and countries. Unfavourable currency has a -6% impact.

Record adjusted EBITDA of $334m increased 24%, and record adjusted EBITDA margin of 49.2% increased 590 basis points over the prior year on strong volume, pricing and productivity. Volumes and adjusted EBITDA improved 8% and 12%, respectively, on the strong Lunar New Year recovery and new plan start-ups. 

Outlook

Air Products expects full-year fiscal 2019 adjusted EPS guidance in the range of $8.20 to $8.25 per share, up more than 10% over prior year at midpoint.

“We remain very optimistic about the future of Air Products. We are confident our strategy differentiates us and gives us the capability to continue growing earnings per share by more than 10% per year over the long term. We have demonstrated this over the past five years, with adjusted EPS growth averaging 13% annually,” said Ghasmi.