Air Products & Chemicals, Inc. (NYSE:APD) is slated to release second-quarter fiscal 2018 results before the market opens on Apr 26.
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The company reported adjusted earnings of $1.79 per share for the first quarter, up 22% from the year-ago quarter. Earnings surpassed the Zacks Consensus Estimate of $1.66.
Air Products reported net sales of $2,216.6 million, up around 18% year over year. The top line also beat the Zacks Consensus Estimate of $2,159.2 million.
Air Products surpassed the Zacks Consensus Estimate in the trailing four quarters with an average beat of around 4.7%.
However, Air Products’ shares have moved up 19% over a year, outperforming the industry’s gain of 10.9%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
For fiscal 2018, Air Products anticipates adjusted earnings in the range of $7.15-$7.35 per share (up from prior view of $6.85-$7.05), an increase of 13-16% from the prior year. The guidance includes an expected benefit of 20-25 cents per share from the U.S. Tax Cuts and Jobs Act. The company expects adjusted earnings in the band of $1.65 to $1.70 per share for the fiscal second quarter, an increase of 15-19% year over year. It also sees capital expenditure of $1.2-$1.4 billion for fiscal 2018.
At the Industrial Gases — America segment, revenues for the soon-to-be reported quarter is anticipated to witness a 4.7% rise from the year-ago figure as the Zacks Consensus Estimate for the second quarter is pegged at $932 million. Operating income is also expected to increase 6.2% year over year as the Zacks Consensus Estimate is pegged at $239 million for the second quarter.
Air Products’ Industrial Gases — Asia segment’s revenues are expected to increase 18.8% from the year-ago quarter as the Zacks Consensus Estimate for the second quarter is pegged at $518 million. At this segment, operating income is expected to increase 24.1% year over year as the Zacks Consensus Estimate is $139 million for the second quarter.
The Zacks Consensus Estimate for revenues for the Industrial Gases — EMEA segment is projected at $494 million for, reflecting an estimated rise of 19.3% year over year. Segment income is also expected to increase 19.5% year over year as the Zacks Consensus Estimate stands at $104 million for the second quarter.
The Industrial Gases — Global segment is expected to suffer a 16.6% year-over-year decline in revenues as the Zacks Consensus Estimate is pegged at $181 million for the second quarter. Segment income is expected to fall 36% year over year as the Zacks Consensus Estimate is pegged at $14.6 million.
Air Products has built a strong project backlog. These projects are anticipated to be accretive to earnings and cash flow over the next few years. In addition, strategic investments in high-return projects, new business deals and acquisitions are expected to drive results in fiscal 2018. The company also remains on track with its cost-reduction programs, which is likely to support margins.
Air Products and Chemicals, Inc. Price and EPS Surprise
Earnings Whispers
Our proven model does not show that Air Products is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. This is not the case here as you will see below:
Zacks ESP: Air Products has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate is pegged at $1.68 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Air Products carries a Zacks Rank #4 (Sell). Note that stocks with a Zacks Rank #4 or 5 (Strong Sell) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
WestRock Company (NYSE:WRK) has an Earnings ESP of +2.32% and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Univar Inc. (NYSE:UNVR) has an Earnings ESP of +2.63% and sports a Zacks Rank #1.
FMC Corporation (NYSE:FMC) has an Earnings ESP of +1.43% and carries a Zacks Rank #2.
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Air Products and Chemicals, Inc. (APD): Free Stock Analysis Report
FMC Corporation (FMC): Free Stock Analysis Report
Univar Inc. (UNVR): Free Stock Analysis Report
WestRock Company (WRK): Free Stock Analysis Report
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