Praxair announced full-year 2012 net income of $1,692m and reported diluted earnings per share of $5.61. On an adjusted basis, full-year net income was $1,681m and diluted earnings per share was $5.57, 3% above the prior year.
Reported operating profit was $2,437m. Adjusted operating profit was $2,502m, compared to $2,469m in the prior year. The increase was driven by higher volumes, higher pricing and productivity, partially offset by currency translation effects. Operating profit in North America grew by 10%, but was largely offset by lower operating profit in Europe and South America.
For the full year, cash flow from operations was a record $2,752m, up 12% from 2011. Capital expenditures, primarily for new production plants under long-term contracts with customers, were $2,180m. The company invested $280m in acquisitions, for seventeen North American packaged gas distributors and an industrial gas business in Russia. The company paid $655m of dividends and repurchased $459m of stock, net of issuances.
For the fourth quarter, net income and diluted earnings per share were $414m and $1.38, as compared to adjusted amounts of $414m and $1.36 in the prior-year quarter, respectively.
Sales in the fourth quarter were $2,799m, comparable to the prior-year, as higher price and acquisitions were offset by negative currency effects. Operating profit in the fourth quarter was $616m versus $619m in the prior-year quarter.
Commenting on the financial results and business outlook, chairman and chief executive officer Steve Angel said, “In 2012, Praxair delivered record operating cash flow of $2.8bn, which represented 25% of sales. We also achieved a record operating margin of 22.3%, which we achieved through global productivity gains as well as price attainment in most operating segments. Our industry-leading North American business achieved double-digit operating profit growth with strength across most end markets. These strong results were mitigated by recessions in Brazil and Europe, moderating growth in China, and significant currency translation headwinds.”
“As we enter 2013, Praxair remains committed to driving performance in an uncertain economic environment. In addition, our backlog of large projects remains strong at $2.6bn and new proposal activity remains solid. This backlog will contribute four percent to six percent growth in 2013, as the plants start up to supply on-site customers under long-term contracts.”
For the full year of 2013, Praxair expects sales in the area of $12bn. The company expects diluted earnings per share to be in the range of $5.85 to $6.10, up five percent to 10%. Full-year capital expenditures are expected to be in the range of $1.8bn to $2bn, and the effective tax rate is forecasted to remain at about 28%.
For the first quarter of 2013, Praxair expects diluted earnings per share in the range of $1.35 to $1.40.