The North American industrial gas specialist, Airgas has unveiled buoyant results during the third quarter of 2012. Highlights include a 12% increase in sales alongside a 21% incline in adjusted diluted EPS on the prior year.
According to reports for the quarter ended 31st December 2011, business trends reflected continued volume growth across the company’s customer base, with particular focus on large manufacturing, petrochemical and energy sectors.
Third quarter adjusted earnings per diluted share were $0.97, an increase of 21% from $0.80 in the prior year. Similarly, sales saw a 12% increase to $1.15bn, with same-store sales appreciated 9%, hardgoods by 14% and gas and rent increasing 7%. Fiscal study shows that acquisitions contributed a 3% increase to sales growth during the quarter, while sales per day remained static on a consolidated basis.
Airgas Chief Executive Officer, Peter McCausland, reflected, “We continue to see evidence of steady economic growth in U.S. manufacturing, as well as in our petrochemical and energy customers.”
He added, “Strong growth in welding and automation equipment revenue is outpacing the remainder of our hardgoods portfolio, which is an encouraging indicator of future activity in our industrial customer base.”
“We continue to see evidence of steady economic growth in U.S. manufacturing, as well as in our petrochemical and energy customers.”
Peter McCausland, CEO, Airgas
The company also witnessed an adjusted operating margin of 11.7% for the third quarter. McCausland elaborated, “Our sharp operating focus drove sequential expansion in our Distribution segment gross and operating margins. Our return on capital increased by 100 basis points over last year to 12.3% as we continue to leverage our national footprint and industry-leading platform on growing sales volumes.”
Meanwhile, year-to-date free cash flow through the third quarter was $175 million, compared to $255 million in the prior year, and adjusted cash from operations was $417m for the current year-to-date period compared to $419m in the prior year.
Airgas has stated that it expects adjusted earnings per diluted share for the fourth quarter of fiscal 2012 to increase 18% to 23% from $0.88 in the prior year to between $1.04 - $1.08. The sequential increase in adjusted earnings per diluted share from the third quarter primarily reflects the impact of two additional selling days, the fall-off of the third quarter holiday impact, and continued business growth in the Distribution segment.
For fiscal 2012, the company forecasts adjusted earnings per diluted share to increase 21% to 22%, from $3.34 in fiscal 2011 to $4.03 to $4.07.
McCausland concluded, “I am pleased with the significant progress we have made on our SAP implementation, with nearly 40% of the business now running smoothly on our new platform. While we are still primarily focused on converting our remaining regional companies to SAP, we have now begun to deploy resources toward the attainment of benefits, consistent with our implementation plan.”