Investing.com -- Shares of Air Products (NYSE:APD) edged lower in trading today after the company reported first-quarter earnings that were slightly above analyst expectations, but revenues that fell short. The company also provided guidance for the second quarter and full fiscal year 2025 that did not meet consensus estimates.
Air Products, a leading industrial gases company, posted first-quarter earnings per share (EPS) of $2.86, a modest $0.01 above the analyst estimate of $2.85. However, revenue for the quarter was $2.93 billion, missing the consensus estimate of $2.96 billion and marking a decline from the same quarter last year.
The company’s GAAP EPS of $2.77 reflected a 1% increase from the previous year, with GAAP net income rising 5% to $650 million. The improved net income margin, which increased by 150 basis points to 22.2%, was attributed to higher pricing net of power and fuel costs, partially offset by costs related to shareholder activism, incentive compensation, and inflation. Productivity improvements and a gain on de-designated cash flow hedges also contributed to the margin expansion.
Despite the slight uptick in adjusted EPS, Air Products’ first-quarter sales saw a 2% decline from the prior year. This was due to lower volumes, particularly impacted by the divestiture of the LNG business and reduced contributions from Europe, although it was partially offset by a significant one-time helium sale in the Americas.
For the second quarter of fiscal 2025, Air Products forecasts an adjusted EPS range of $2.75 to $2.85, which is below the consensus estimate of $3.07. The full-year fiscal 2025 guidance remains unchanged at an adjusted EPS of $12.70 to $13.00, with capital expenditures expected to be between $4.5 billion and $5.0 billion.
A Wall Street analyst described the company’s results and outlook as "soft," signaling a less optimistic view on the company’s near-term performance.
Investors appear to be reacting to the mixed financial results and the cautious outlook, as the stock moved lower on the news. Air Products remains committed to returning value to shareholders, as evidenced by the increase in its quarterly dividend for the 43rd consecutive year, aiming to distribute approximately $1.6 billion to shareholders in 2025.
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