Air Products has declared net income of $264m for its fiscal first quarter ended December 2007, an increase of 15% and heralding the impressive start of a promising new year ahead for the company.
First quarter revenues of $2,474m increased 9% from the prior year on higher volumes, improved pricing across most segments, and a weaker dollar, with operating income of $372m showing an increase of 17% over the previous year.
The results include $0.03 of discontinued operations related to a previously announced definitive agreement to divest Air Products’ interest in its polymers joint ventures to Wacker Chemie AG and the completed sale of the company’s High Purity Process Chemicals (HPPC) business to KMG Chemicals during the quarter.
On a continuing operations basis, net income increased 16%, and diluted EPS increased 17%.
John McGlade, President and Chief Executive Officer, enthusiastically said, “Our fiscal year is off to a great start, thanks to the dedication and commitment of our 22,000 employees worldwide. We delivered double-digit earnings growth and significant margin improvement during the quarter. This strong performance reflects the continued emphasis we have placed on delivering profitable growth through our global focus and relentless drive for productivity.”
In terms of the strongest performing areas, it seems the merchant gases and healthcare sectors showed marked improvements for the company throughout the first quarter. Merchant Gases sales of $897m rose 21% and operating income of $175m increased 26% over the prior year on higher volumes, improved pricing, a weaker dollar and productivity. Healthcare meanwhile, experienced sales increases of 10% to reach $171m and operating income of $14m represents an increase of 45% over the prior year, driven by volume growth and lower costs in Europe.
Tonnage Gases sales of $791m were up 15% and operating income of $111m increased 16% as revenues increased from higher volumes, increased natural gas costs and a weaker dollar. The Electronics and Performance Materials business sector witnessed sales of $514m, up 6% and operating income of $66m had increased 33% over the prior year, again on improved volumes. Equipment and Energy sales of $100m and operating income of $9m decreased from the prior year, as expected. The company received one new LNG heat exchanger order during this quarter.
Discussing the company’s outlook for the future, McGlade commented, “Economic activity through the first quarter of this year is tracking in line with our expectations. Looking forward, we expect high bidding activity and solid demand from our customers, who rely on our products and services to improve energy efficiency, plant productivity, product quality and environmental performance.”
“We believe the actions we have taken over the past few years have transformed us into a high performing company that is positioned to produce strong results in a slowing economic environment. Our focus on growth markets and geographies, productivity and streamlined operations, combined with a robust backlog of projects, should allow us to consistently deliver higher growth and higher returns in both the short and long-term,” he concluded.