Air Products lowers its earnings forecast amid weak helium sales and LNG impact
Air Products reported a lower-than expected fourth-quarter profit and lowered its earnings expectations for the full year on Thursday as weak helium demands, project exits, and the impact from a previous LNG business sale continued weighing on volumes.
U.S. Manufacturing remained slow in June, which eroded consumer and business confidence and affected demand for Air Products gases and related products.
Chemical industry is facing a weaker demand on key markets such as China and Europe.
According to data compiled and analyzed by LSEG, the company forecast fourth-quarter adjusted EPS between $3.27 and $3.47. This is below the average analyst estimate of $3.48.
The industrial gas producer now expects to earn adjusted earnings per share between $11.90 and $12.10 in fiscal 2025. This is a significant increase from its previous range, which was $11.85 to $12.15
Air Products reported a $99m gain in the third quarter from the sale of its subsidiary and other assets. This was offset by $25m in shareholder activism expenses and $24m for cost revisions.
The company has lost its proxy battle against activist investor Mantle Ridge.
The reported quarter saw a strong performance in Europe and Asia, but margin pressures and declining volumes in the core Americas segment. This was primarily due to helium demand weakness and project exits.
The company reported that Americas operating income for the third quarter dropped 4%, to $374 Million, and margins contracted 200 basis points, to 29,7%. This was due to higher maintenance-related costs, as well as the impact of previously notified project closures.
Volumes dropped by 6% in the region, due to reduced activity on site and slow helium sales.
LSEG data shows that the Lehigh Valley company in Pennsylvania posted a profit adjusted of $3.09 per common share for the April-June period, compared with analysts' expectations of $2.99. (Reporting by Arunima Kumar in Bengaluru; Editing by Vijay Kishore)
(source: Reuters)
