Streamlining its business and reaping the rewards of strong volume growth, Air Products has reported net income of $70m for its fiscal third quarter ended 30th June 2008 and witnessed healthy performances in both its Tonnage gases and Merchant gases sectors.
Third quarter revenues of $2,808m rise 16% from the prior year on higher volumes in the Merchant Gases and Electronics and Performance Materials segments, higher pricing in Merchant Gases, favourable currency, and higher natural gas cost pass through.
The results include an impairment charge for the company’s US Healthcare business of $237m after-tax and income from discontinued operations of $19m after-tax, principally from the sale of its remaining polymer emulsions assets.
Excluding the US Healthcare impairment charge, operating income of $382m increased 9% versus the prior year.
John McGlade, Chairman, President and CEO said, “Our businesses again delivered strong growth in a challenging economic environment. Our consistent operating performance reflects the actions we have taken to transform Air Products into a higher growth and less cyclical company under any economic scenario.”
“We also announced two major orders in Tonnage Gases, completed the sale of our remaining polymer emulsions assets and are moving forward with the decision to sell our US Healthcare business.”
Among the many highlights for the company’s results, Air Products recorded Merchant Gases sales of $973m were up 19% and operating income of $177m increasing 20% over the prior year - on improved volumes across all regions, continued strong pricing in North America, and favourable currency impacts.
In addition, Tonnage Gases sales of $976m rose 26% on higher natural gas price pass through, while Electronics and Performance Materials sales of $580m were up 9%, and operating income of $70m increased 13% over the prior year on higher volumes.
Healthcare sales of $172m also rose 9%, and excluding the impairment charge, operating income of $13m increased over the prior year - driven by favourable currency, continued volume growth and good cost performance in Europe.
Looking ahead to the next quarter and beyond, McGlade added, “We expect to continue to benefit from our very strong new business signings and the geographic diversity of our markets and portfolio of businesses. We are not, however, relying on growth and pricing alone. We will continue to focus relentlessly on driving productivity and reducing costs.”
The company currently anticipates fiscal fourth quarter EPS from continuing operations in the range of $1.37 to $1.42 per share, or 19-23% year-on-year earnings growth.