Praxair’s results in the first financial quarter of 2015, as compared to the prior year, were challenged by negative impacts from foreign currency translation, as the U.S. dollar strengthened sharply against most foreign currencies.
Sales in the first quarter were $2.757bn, 9% below the prior-year quarter, due to the impact of negative currency translation of 8% and lower cost pass-through of 2%.
Reported first-quarter net income and diluted earnings per share of $416m and $1.43, respectively.
Organic sales growth of 1% was driven by higher price. Overall volumes were comparable to the prior-year quarter as volume growth in North America and Asia was offset by lower volumes in South America. Europe volumes remained stable.
Operating profit in the first quarter was $623m, 8% below the previous year quarter. Excluding currency effects, operating profit was steady with the prior-year period. Operating profit as a percentage of sales grew to 22.6% and the EBITDA margin grew to a record 33.0% primarily due to strong cost control and productivity gains.
Commenting on the financial results and business outlook, Chairman and Chief Executive Officer Steve Angel said, “Praxair’s competitive advantages and operational excellence enable us to continuously position the business for shareholder value creation regardless of macro-economic conditions. During the quarter, we signed two new long-term product supply agreements with petrochemical customers in the U.S. Gulf Coast and Southern China. Both projects build off of existing strong pipeline networks.”
“Growth headwinds persist from the strength of the U.S. dollar and the impact of lower commodity prices on our customer base. However, our less cyclical end-markets continue to perform well, which speaks to our strength in diversity of end-markets. We anticipate these trends will continue throughout 2015.”
Angel concluded, “Praxair remains focused on delivering high-quality results and grew operating margin to 22.6% this quarter due to our employees’ effectiveness in controlling costs and delivering price. We continue to improve the business quality and are well positioned for further margin expansion with any economic recovery.”
For full-year 2015, Praxair expects sales in the range of $11.4bn to $11.7bn. This sales guidance assumes a negative currency impact of approximately 10% versus 2014.