Air Products defies US slowdown, raises guidance

23 April 2008 20:06  [Source: ICIS news]

TORONTO (ICIS news)--Air Products continues to defy the US slowdown with strong sales outside its domestic market, prompting it to raise its full-year profit guidance, Paul Huck, chief financial officer (CFO) of the US industrial gases major said on Wednesday.


“The continued decline in US housing and the weakness in auto is being offset by growth in manufacturing exports,” Huck said in briefing analysts on Air Products’ fiscal second-quarter results and outlook.


“While there is continued economic uncertainty and speculation we still see strength and growth in our markets, both near-term and long-term,” he said.


Demand factors, including higher energy prices and stricter environmental regulations, created opportunities for many of Air Products’ offerings, he said.


Air Products was seeing about 2% industrial production growth in US manufacturing for its fiscal year ending 30 September, compared with last year, he said.


In Europe, Air Products expected to see growth of around 2% for the fiscal year although markets in the UK and Spain were essentially flat, Huck said.


Growth in Asia was on track with Air Products’ forecast at around 6 to 7%, he said.


Air Products was raising its EPS guidance to the range of $4.95-5.05, up from previously $4.85-5.00, reflecting 18-20% year-on-year growth, Huck said.


He also said that Air Products' US healthcare business continued to be “a drag on the company earnings” and may be sold.


A strategic review process for that part of the business was expected to be completed during the current fiscal third quarter, he added.


In a research note, analysts at HSBC, the London-based international bank, said Air Products’ fiscal second quarter benefited from favourable currency impacts as it derived some 40% of sales from outside the US.


($1 = €0.63)

By: Stefan Baumgarten
+1 713 525 2653

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