Air Products: “there are more legs to the restructuring story”


Following a meeting with Air Products’ chief financial officer (CFO) Citigroup analysts believe the company’s expected margins have been undervalued.

P.J. Juvekar, explains, $quot;We sat down with APD’s CFO and walked away thinking there are more legs to the restructuring story. The upside was not built into our forecast.$quot;

During the meeting the CFO outlined three areas for improved margin expectations. The first is in merchant gases, where the company goal is 20 percent by end of 2008, and the current Citigroup model is expecting just 18.5 percent. Secondly in the area of electronics, Air Products expects a margin of 15 percent and current city projections are at 12.5 percent. Finally in healthcare, the company’s goal is 15% and the Citigroup’s model holds at just 11.5 percent.

The previous figures had not taken into account the benefits of holding a regional plant in Asia (so it does not have to ship from the US), and the elimination of 3rd party gas sales that have been unprofitable.

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