Airgas today provided an update on organic sales growth, its previously announced $600m share repurchase program, and the potential impact on its adjusted earnings guidance for its fourth quarter ending the 31st of March 2013.
“Organic sales growth in our Distribution segment has been disappointing this quarter,” said Executive Chairman Peter McCausland. “Although organic sales growth in January was in-line with the low-single-digit growth assumption in our fourth quarter guidance, organic sales growth for the month of February was negative 2%. As a result, quarter-to-date organic sales growth through February was flat compared to the prior year and roughly 2% to 3% behind our guidance assumptions, with the shortfalls being volume-related and in both gases and hardgoods.”
“Sales to-date in the month of March have not improved appreciably over February, and absent a strong finish in the next ten days, these weaker-than-expected sales suggest that we may miss the low end of our adjusted EPS guidance of $1.18 by approximately 4%,”
McCausland continued. “We hope to make up some ground before the end of the month. However, given the daily sales nature of our business and the limited visibility in the economy, we cannot accurately predict at this time where we will land for the quarter. If there are any material changes in our viewpoint, we will make an announcement at that time.”
“On a positive note, we have continued to realise SAP benefits as expected during the quarter, and we have substantially completed our share repurchases. The impact of the share repurchases in the current quarter will be immaterial due the timing of the purchases and the pre-funding of the financing to take advantage of the attractive debt markets,” added McCausland.
“And, despite the challenges we are facing and have been facing over the past few quarters in this economic environment, we continue to be very optimistic about the long-term prospects for the US manufacturing and energy industries, as well as non-residential construction, and our ability to leverage our unique value proposition and unrivaled platform to drive growth.”