Praxair has reported record quarter results with an expectation that operating profit will grow by up to 18 per cent for the full year.
The quarterly dividend will be 18 cents per share, payable on September 15.
Praxair is the largest industrial gases company in North and South America, and one of the largest worldwide, with 2004 sales of $6.6 billion.
The company has reported a record second-quarter net income of $209 million, versus $175 million earned in the second quarter of 2004. Diluted earnings per share grew 19 per cent to 63 cents, compared to 53 cents in last year's quarter. Net income grew due to strong growth in sales and operating profit compared to the year-ago quarter.
Sales in the quarter rose 20 per cent to $1,919 million, compared to $1,603 million in the 2004 period and the operating profit of $322 million grew 18 per cent from $274 million in the second quarter of 2004.
The company has seen a slowdown in the steel and electronics markets but says solid execution of its growth programs is more than making up for the difference.
Sales and operating profit were higher in every geographic region with the strongest sales growth coming from global energy and manufacturing markets.
In North America, sales in the second quarter were up 13 per cent to $1,153 million from $1,016 million in the year-ago quarter. Sales grew in most end markets including manufacturing and oil and gas well services. Operating profit grew from $156 million a year ago to $161 million, including the effect of an $8 million charge related to a distribution facility.
In Europe, sales grew 42 per cent to $293 million in the quarter. Excluding the effect of a stronger euro, sales grew 36 per cent due primarily to the purchase of industrial gas business in Germany. Modest growth in Spain was partially offset by a slowing economy in Italy. Sales were higher to chemicals and manufacturing markets. Operating profit grew 38 per cent to $72 million, from $52 million in the year-ago quarter.
In South America, sales of $274 million grew 30 per cent – 11 per cent excluding currency effects. Underlying sales growth reflected higher volumes and higher pricing as compared to the 2004 period, due to growth in metals and manufacturing markets. Operating profit rose 31 per cent to $51 million from $39 million in last year’s quarter.
Sales in Asia grew 13 per cent to $137 million, from higher sales in China, India, and Korea driven by electronics and metals markets, including new plant start-ups. Operating profit rose 26 per cent to $24 million.
Praxair Surface Technologies' sales in the quarter grew to $124 million, 12 per cent over last year. Operating profit was $14 million versus $8 million in 2004. The company says OEM aviation coatings markets continue to be strong, and higher volumes of industrial coatings and powders for gas turbines and oil well service parts contributed to the sales increase.
Cash flow from operations in the quarter was $390 million and capital expenditures were $198 million.
For the third quarter of 2005, Praxair expects diluted earnings per share in the range of 61 to 64 cents, 15 to 21 per cent above the prior year.
For the full year of 2005, Praxair expects sales growth of 14 to 16 per cent, and operating profit growth of 15 to 18 per cent.
For further information: