Led by South America and Asia, Praxair Inc. has again reported strong sales growth in every geographic region as its second quarter results are declared and the company reflects on net income growth of 20%.
Praxair recorded second-quarter net income of $349m compared to $291m in the prior-year quarter, representing net income and earnings per share growth of 20% and 21% respectively, versus the prior-year quarter.
Sales in the second quarter totalled $2.878m, up 23% from $2.332m in the second quarter of 2007. Strong sales growth was achieved in every geographic region, led by South America and Asia.
Operating profit was a record $543m, 24% above $439m in the prior-year quarter.
Due to strong cash flow generation from operations, the company has to date completed $931m of stock repurchases under the $1bn repurchase programme authorised in July 2007. The company has now announced a new $1bn stock repurchase programme which has been authorised by Praxair’s board of directors, based on a positive outlook for continued strong growth in earnings and cash flow generation.
Commenting on the results and business outlook, Chairman and CEO Steve Angel said, “We had another strong quarter. Our results reflect strong sales growth in Asia and South America due to the high level of investment by our customers in these developing economies. In North America, we are continuing to see strong demand from the energy sector and steady growth in our base business. We therefore expect that our results will continue to reflect strong year-over-year growth in sales and earnings.
In North America second quarter sales reached $1.573m, 22% above the prior year and in Europe sales in the second quarter of $406m grew 21% from $336m. Currency effects contributed 16% to sales growth, while underlying sales growth came primarily from growth in merchant and packaged gases volumes in Germany and Italy.
In South America, second-quarter sales of $514m grew 31% versus the prior-year quarter due to higher prices and volumes, and favourable currency effects of 16%. Similarly, sales in Asia grew 30% to $232m in the quarter, attributable primarily to strong volume growth from new plant start-ups and higher sales to the electronics, manufacturing and metals markets.
Praxair Surface Technologies had second-quarter sales of $153m, 17% above the prior-year quarter.
For the full year of 2008, Praxair expects year-over-year sales growth in the range of 16% to 20% and anticipates diluted earnings per share to be in the range of $4.20 to $4.30.
Looking forward to the remainder of 2008, Angel commented, “The new stock repurchase programme which we announced today reflects our positive outlook. We expect to fund this repurchase programme largely out of operating cash flow, while simultaneously investing in a record number of new on-site projects for our customers.”