Praxair reports net income of $314m, or diluted earnings per share (EPS) of $1.16, for its fiscal first quarter; 14% above last year’s prior quarter.
Sales growth was precipitated by higher overall volumes in all geographic regions and foreign currency appreciation. Volume growth was broad-based across most end-markets. Chemicals, metals and electronics showed the greatest increase, while growth in manufacturing lagged.
Praxair Chairman and CEO, Steve Angel commented, “We are seeing signs of volume recovery in all our end markets, though the strength varies significantly by geography.”
He elaborate, “Asia and South America showed the strongest underlying sequential growth, while in the US and Europe, recovery was slower but began to accelerate in March.”
The operating profit grew 8% to $277m on last year’s equivalent quarter. Similarly, Praxair announced adjusted operating profit in the first quarter of $506m – a 14% growth on Q1 of 2009. Praxair attributed this to higher volume and lower fixed costs. Sequentially, sales grew 5% from the 2009 fourth quarter mainly due to improving merchant liquid volumes.
The company generated strong cash flow from operations in Q1. First quarter cash flow of $483m funded $288m of capital expenditures, primarily for new production plants under long-term contracts with customers.
Steve Angel looked towards the forthcoming year saying, “We are optimistic that growth in the US and Europe will continue to improve,” but stressed that it will occur “at a moderate pace”. For the second quarter of 2010, Praxair anticipate diluted earnings per share between $1.10 to $1.15.
Throughout the full year of 2010, the corporation expects sales in the region of $10bn, with adjusted diluted earnings per share between $4.50 and $4.65. Similarly, the overall year capital expenditures are predicted to be approximately $1.4bn, with an effective tax rate forecasted at 28%. These results exclude the 8% impact from Venezuelan currency devaluation during Q1.
Praxair Surface Technologies had first quarter sales of $136m compared to $123m in the prior year quarter. Sales growth was attributed to a 2009 acquisition which was partially offset by lower volumes of industrial gas turbine coatings. Operating profit was $19 m in the quarter, versus $22m in quarters one and four of 2009. In a statement to Gasworld, Praxair attributed this to “integration expenses and lower volumes, partially offset by strong productivity gains.