Praxair reported third-quarter net income and diluted earnings per share of $430 million and $1.43 respectively. These results include an income tax benefit, cost reduction charges taken primarily in Europe, and a pension settlement charge.
Excluding these items, adjusted net income and diluted earnings per share were $419 million and $1.39, 2% and 1% below the prior-year quarter, respectively.
Sales in the third quarter were $2,774 million, 4% below the prior-year quarter. Sales growth was 4%, excluding negative foreign currency translation and cost pass-through effects. Underlying sales grew in all geographic segments except Europe. North American sales growth reflects higher price and solid demand from the manufacturing, energy and metals markets. Sales growth in Asia reflects new plant start-ups for chemicals and metals customers partially offset by reduced shipments to the electronics and photovoltaic industries. Europe and South America sales were negatively impacted by weak macro-economic conditions and significant foreign currency headwinds.
Reported operating profit in the third quarter was $558 million. Adjusted operating profit of $623 million was 1% below the prior-year quarter of $632 million. Excluding currency effects, operating profit grew 7% from price, productivity gains and acquisitions. Adjusted operating margin as a percentage of sales was 22.5%.
Commenting on the financial results and business outlook, chairman, president and chief executive officer Steve Angel said, “Praxair’s relentless focus on operational excellence, project execution and financial discipline will continue to deliver increasing cash flow and earnings per share for our shareholders.
While we are expecting that macro-economic conditions overall may continue to weaken in the near-term, we will continue to drive long-term growth through our strategy of focusing on energy, environmental and emerging markets opportunities.”
For the fourth quarter of 2012, Praxair expects diluted earnings per share to be in the range of $1.35 to $1.40.
For the full year of 2012, Praxair expects sales in the area of $11.2 billion, which on a year-over-year comparison basis reflects negative currency effects and cost pass-through. For the full year of 2012, the company expects adjusted diluted earnings per share to be in the range of $5.54 to $5.59. Excluding the impact of currency, adjusted full-year diluted earnings per share growth would be approximately 7% to 8% versus 2011.
Full-year capital expenditures are expected to be about $2.2 billion and the adjusted effective tax rate is forecasted to be about 28%.