Airgas, Inc. has provided an update on organic sales growth and issued revised earnings guidance for its fourth quarter ending 31st March 2015, describing organic sales growth for the quarter as ‘disappointing’.
The company’s previous fiscal 2015 fourth quarter earnings per diluted share guidance was $1.25 to $1.30. Now, however, the company has revised this down to $1.13 to $1.16.
Airgas noted greater than expected declines in growth rates in its Energy & Chemicals ad Manufacturing customer segments, in addition to expected challenges due to the uncertainty in oil pricing.
“Organic sales growth has been disappointing this quarter,” said President and CEO Michael Molinini. “Organic sales year-over-year growth rates, which were 6% in the December quarter, have moved lower this quarter. Based on sales to date and current trends, we now expect year-over-year organic growth for our fourth quarter to be in the range of 1% to 2%, compared to growth of 6% to 7% which was assumed in our guidance.”
“While we anticipated near-term sales challenges due to the uncertainty caused by the significant and rapid decline in oil prices and the impact of the strong dollar on manufacturers that export, we are experiencing greater than anticipated declines in growth rates in our Energy & Chemicals and Manufacturing customer segments. We have also been impacted by challenging weather conditions throughout much of the country.”
Though Airgas notes that the economy is ‘clearly weaker’ than it was in its December quarter, and uncertainty in the marketplace makes it difficult to predict its near-term sales outlook, the company sees optimism ahead for both itself and the US economy as a whole.
Executive Chairman Peter McCausland explained, “We continue to look hard at all our operating costs and execute our productivity initiatives, and we will manage more tightly all capital expenditures until sustained growth levels return. We remain optimistic that the US economy and Airgas will ultimately benefit as lower energy costs filter through the large and diverse customer base we serve, but we cannot count on strong organic growth in the near-term.”
“We are confident that Airgas is maintaining or improving its competitive position in the industry.”