Air Products & Chemicals, a leading provider of essential industrial gases and chemicals, experienced a surprising decline in sales during the fiscal first quarter. This led to a revision of their annual earnings outlook, dampening investor expectations.
Sales and Earnings Figures
During the quarter ended December 31, the company reported a profit of $609.3 million, equivalent to $2.73 per share. This marks a slight increase from the previous year’s quarter, which recorded a profit of $572.2 million, or $2.57 per share. However, after adjusting for one-time items, the adjusted earnings figure stood at $2.82 per share, falling short of analysts’ expectations of $3 per share.
The decline in sales contributed to this disappointment, as the company generated $3 billion in revenue, down from $3.17 billion in the same period last year. Analysts had anticipated growth to reach $3.2 billion.
Factors Influencing Sales Performance
The lower energy-cost pass-through played a significant role in the decline, accounting for an 11% drop in sales. However, this did not have a significant impact on earnings. Despite this setback, the company experienced a 3% increase in volumes and a 1% rise in prices. Additionally, favorable foreign currency translation also contributed positively.
Revised Earnings Outlook
In light of these unexpected sales figures, Air Products & Chemicals has adjusted its earnings outlook for fiscal year 2024. The company now expects adjusted earnings of $12.20 to $12.50 per share, representing a 60-cent reduction from its previous guidance range. Analysts surveyed by FactSet had originally been forecasting earnings of $12.97 per share.
Looking ahead to the current quarter, the company anticipates adjusted earnings to range from $2.60 to $2.75 per share. This falls below the current estimates of $3.16 per share.
Despite these challenges, Air Products & Chemicals remains committed to navigating the ever-changing market landscape and delivering value to its stakeholders.
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