Air Products has announced its third quarter (Q3) results, led by strong performance in Merchant Gases, Electronics and Performance Materials.
For the quarter ending 30 June 2014. Net income was US$ 314 million, up 9%, and diluted earnings per share (EPS) was US$ 1.46, an increase of 7%, compared with the third quarter of 2014.
Q3 sales were US$ 2635 million, having increased 3% from the previous year, driven by higher volumes across all business segments. Excluding the prior exit from the Polyurethane Intermediate business (PUI), underlying sales improved 4% versus 2013 on 3% higher volumes. Sequentially, sales increased 2% on 4% higher volumes in Electronics and Performance Materials, Tonnage Gases, and Merchant Gases.
Operating income of US$ 414 million increased 8% versus 2013, on higher volumes in Electronics and Performance Materials, and better pricing in Merchant Gases. Operating margin of 15.7% improved 70 basis points, with positive volumes more than offsetting higher costs, primarily from maintenance outages. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for Q3 was US$ 653 million, up 7% versus prior year and 6% sequentially.
Results by business segment
Sales of US$ 1077 million increased 4% versus 2013, primarily on higher volumes in Asia and US/Canada. Liquid oxygen and nitrogen volumes increased in all regions, partially offset by lower global helium volumes. Operating income of US$ 174 million increased 5% versus 2013, largely on higher volumes and better pricing. Sequential operating income improved 21%, due mainly to recovery of weather related costs incurred in the second quarter. Operating margin of 16.1% was up 10 basis points versus last year and up 230 basis points sequentially.
Sales of US$ 835 million decreased 1% versus last year. Excluding PUI, volumes grew 2% on continued hydrogen demand in the US Gulf Coast and the contributions from new plants. Operating income of US$ 118 million was up 3% versus the prior year, excluding the effect of the PUI business exit, as contributions from new plants more than offset higher maintenance costs.
Electronics and Performance Materials
Sales of US$ 618 million increased 9% versus 2013 on 9% higher volumes. Electronics sales were up 6% on strong growth in all segments. Performance Materials sales increased 12% on higher volumes in all regions and across all product lines. Operating income was 23%, and operating margin improved 200 basis points versus the previous year on higher volumes and better cost performance.
Equipment and Energy
Sales of US$ 104 million increased 1%, and operating income of US$ 17 million increased 9% versus 2013, driven largely by LNG project activity. The sales backlog of US$ 584 million increased 78% versus the previous year on several new large orders.
Adapted from a press release by Emma McAleavey.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/29072014/air-products-third-quarter-results-1022/