Air Products Reports Mixed Q3 Results; Shares Tank 5.2%

Shares of Air Products and Chemicals (APD) declined 5.2% on Monday after the industrial gases company reported mixed results for the fiscal third quarter.

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Revenues soared 26.1% year-over-year to $2.6 billion and surpassed the Street’s estimates of $2.49 billion. The company benefitted from higher volumes from COVID-19 recovery, new plants and acquisitions, partly offset by lower contributions from the Lu’An facility in China.

Adjusted earnings came in at $2.31 per share, up 15% from $2.01 per share in the year-ago quarter. However, it lagged analysts’ estimates of $2.36. (See Air Products stock charts on TipRanks)

Sales of industrial gases in the Americas grew 25.1% year-over-year to $1.1 billion, driven by merchant COVID-19 recovery, higher medical oxygen sales in South America and elevated pricing. Similarly, revenues in Europe, the Middle East and Africa (EMEA) increased 45% to $623 million, reflecting benefits from favorable currency and higher energy cost pass-through.

The President and CEO of Air Products, Seifi Ghasemi, said, “We continue to build on what we do best, driving the energy transition by developing, owning and operating world-scale, sustainability-driven projects and forming strategic partnerships that enhance our leadership positions.”

For Q4, Air Products expects adjusted EPS to be between $2.44 and $2.54, up 11-16% from the same quarter last year. For Fiscal 2021, the company expects its adjusted EPS to be in the range of $8.95 to $9.05, up about 8% from 2020.

Notably, Air Products expects capital expenditures of nearly $2.5 billion for the full Fiscal Year 2021. This guidance does not include the Jazan transaction.

Two months ago, Societe Generale analyst Peter Clark reiterated a Buy rating on the stock and raised the firm’s price target to $334 from $295. The new price target implies 21.1% upside potential.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus based on 8 Buys and 3 Holds. The average Air Products price target of $329.50 implies 19.5% upside potential.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Air Products, with 8.8% of investors on TipRanks increasing their exposure to APD stock over the past 30 days.