Air Products & Chemicals IncFollowairproducts.com
Sentiment Score: -40
Sentiment Change: -38
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Air Products & Chemicals Inc Earnings - Analysis & Highlights for Q1 2025
Overview
PositivesNegativesOutlook
- Adjusted EBITDA increased by 7% due to favorable volumes, costs, and equity affiliates' income.
- The company is seeing broad-based pricing improved by 1% in Europe.
- Adjusted EBITDA margin was up 140 bps due to favorable business mix and price.
- The total company price was up by 1%, equating to a 2% improvement for the merchant business, driven by continued pricing strength in the Americas and Europe.
- Sales and profits were lower in Q1 for the Corporate and Other segment, due to the sale of the LNG business.
- The company is seeing a bit of a headwind in Q1, about $0.07.
- The company is watching tariffs and the impact from a customer perspective, the strengthening dollar, and the general macro and geopolitical environment.
- The company is closing out the execution of its productivity programs that it had over the last couple of years.
- The company is seeing a power cost increase in Europe.
- Adjusted EPS for Q2 is expected to be in the range of $2.75 to $2.85, up by 1% to 4% reflective of the LNG divestiture.
- Europe results show broad-based pricing improved by 1%, volume was down by 5%, driven by lower onsite and continued weakness in merchant demand, primarily helium. Adjusted EBITDA was 3% lower as weaker volume was partially offset by higher price and favorable costs.
- The company continues to evaluate actions to reduce costs and improve services to customers.
- The company expects it to be much less, but that, again, will be no additional outlay for Air Products.
Q&A Highlights from Air Products & Chemicals Inc Earnings Call Q1 2025
- Analyst asked about the company's approach to managing the various moving parts in Asia, including the helium business, electronics recovery, and macroeconomic conditions in China.
- The company is focused on productivity and delivering to customers, while monitoring tariffs and the impact of China's in-country stimulus. They remain cautious about the market and are watching the situation closely.
- The company is focused on productivity and delivering to customers, while monitoring tariffs and the impact of China's in-country stimulus. They remain cautious about the market and are watching the situation closely.
- Analyst asked about the status of the permitting project in the World Energy.
- The permitting project in World Energy is still on hold, awaiting permits. Management will provide updates when available.
- The permitting project in World Energy is still on hold, awaiting permits. Management will provide updates when available.
- Analyst asked about the benefit from the outsized sale.
- The outsized sale, also known as the non-reoccurring Americas sale, contributed approximately 10% to EPS for the quarter.
- The outsized sale, also known as the non-reoccurring Americas sale, contributed approximately 10% to EPS for the quarter.
- Analyst asked about the overall helium market and the pricing differences in different geographic jurisdictions.
- The helium market is global, and pricing varies depending on the location and availability of the gas. Air Products & Chemicals Inc. is focused on maintaining a competitive pricing strategy for its helium products.
- The helium market is global, and pricing varies depending on the location and availability of the gas. Air Products & Chemicals Inc. is focused on maintaining a competitive pricing strategy for its helium products.
- Analyst asked about the corporate cost baked into the company's guidance.
- The company saw a headwind of about $0.07 in the quarter, which was due to inflation and a decrease in incentive compensation. The company also had productivity actions that resulted in some cost associated with hiring and exiting individuals in other geographies. The productivity actions will start to flow through this year, particularly in the second half.
- The company saw a headwind of about $0.07 in the quarter, which was due to inflation and a decrease in incentive compensation. The company also had productivity actions that resulted in some cost associated with hiring and exiting individuals in other geographies. The productivity actions will start to flow through this year, particularly in the second half.
- Analyst asked about the impact of tariffs on demand and customer production levels in 2017 and 2018, particularly in Asia.
- The company will need to come back with an answer on this question, as the CFO was not in charge during those years.
- The company will need to come back with an answer on this question, as the CFO was not in charge during those years.
- Analyst asked about the capital intensity of the Uzbekistan upgrade.
- The company negotiated the upgrade into the acquisition price and will not require any additional capital outlay. The acquisition price will remain the same, and the company expects the cost to be much less than the $100 million outstanding.
- The company negotiated the upgrade into the acquisition price and will not require any additional capital outlay. The acquisition price will remain the same, and the company expects the cost to be much less than the $100 million outstanding.
- Analyst asked about the benefit of the company's cost-cutting and restructuring initiatives in 2023 and 2024 and how it will sequence through 2025.
- The company has taken about 5% of its workforce down, resulting in $75 million in cost savings over a fiscal year. However, inflation and wage increases could compensate for some of the savings. The company expects the cost productivity to support the back half of the fiscal year.
- The company has taken about 5% of its workforce down, resulting in $75 million in cost savings over a fiscal year. However, inflation and wage increases could compensate for some of the savings. The company expects the cost productivity to support the back half of the fiscal year.
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