Airgas, Inc. has reported robust first quarter earnings. The North American industrial gas firm that recently avoided a take-over from Air Products, Inc., recorded net earnings of $74.8m, or $0.93 per diluted share, for its first quarter ended 30th June 2011.

Peter McCausland, Airgas CEO expressed his confidence in the firm, “Although more than a year old, the economic recovery has been slow, and the strength displayed in manufacturing-intensive regions of the U.S. and in our hardgoods business is indicative of the early stages of a recovery. Since the beginning of our fiscal year in April, we have acquired four businesses with nearly $70 million in aggregate annual revenues, including industrial gas and welding distributor ABCO in New England, as well as carbon dioxide and dry ice producer and distributor Pain Enterprises in the Midwestern U.S.”

“Even with the burden of SAP implementation costs, the strength of our business in a modest economic expansion is evident. Our return on capital increased by 160 basis points over last year to 12.1% as we continue to leverage our national footprint and industry-leading platform as sales volumes recover,” continued McCausland.

First quarter sales were $1.2bn, reflecting an 11% increase over the prior year. Total same-store sales grew 9% over the quarter, with hardgoods up 13% and gas and rent up 7%. Acquisitions contributed sales growth of 2% in the quarter, while a sequential comparison of sales revealed a 6% increase between the fourth quarter of 2010, both in total and on a sales per day basis.

Adjusted operating margin for the quarter was 12.4%, a 10 basis point improvement over the prior year, despite a 60 basis point impact from incremental SAP implementation costs and depreciation expense. Nevertheless McCausland was quick to rebuff this. He commented, “Even with the burden of SAP implementation costs, the strength of our business in a modest economic expansion is evident. Our return on capital increased by 160 basis points over last year to 12.1% as we continue to leverage our national footprint and industry-leading platform as sales volumes recover.”

Outlook
Thanks to these encouraging results, the company expects adjusted earnings for the second quarter of fiscal 2012 to increase 19% to 24% from $0.83 in the prior year to $0.99 to $1.03, which includes $0.08 of SAP implementation costs and depreciation expense, compared to $0.05 in the prior year.

For fiscal 2012, the Company expects adjusted earnings per diluted share to increase 17% to 21% from $3.34 in fiscal 2011 to $3.90 to $4.05, which includes an anticipated $0.32 of SAP implementation costs and depreciation expense, compared to $0.14 in fiscal 2011.