Air Products lowers Q1 earnings estimate, cuts 7% of workforce

16 December 2008 12:23  [Source: ICIS news]

LONDON (ICIS news)--Air Products has revised its earnings outlook for its fiscal 2009 first quarter in response to the global economic crisis and will cut 7% of its global workforce, the US industrial gases company said on Tuesday.

The pre-tax charge to earnings in the quarter ending 31 December was expected to be in the range of $140m (€102m) to $160m, or approximately $0.43 to $0.50 per share, the company said in a statement. It was expected to reduce fixed costs by approximately $50m in fiscal 2009, with savings expected to exceed $110m in fiscal 2010 and beyond, it added.

About three-quarters of this restructuring charge would be for severance costs related to the elimination of approximately 1,300 positions, or about 7% of Air Products' global workforce.

The restructuring charge was aimed at reducing overhead and infrastructure costs, reducing and refocusing elements of the company's technology and business development spending, and lowering its plant operating costs, said Air Products.

"These cost-reduction actions are necessary to reach our margin improvement goals. They are also in response to declining business conditions around the world,” said chairman, president and CEO John McGlade.

“This is clearly one of the weakest business environments we have seen across our end-markets. However, our financial position remains strong, and with a significant portion of our business under medium- and long-term supply contracts, we expect to continue generating strong cash flow," he added.

The company’s quarter-to-date sales through November were down 6%, principally due to a falloff in consumer demand for semiconductors and liquid crystal displays impacting demand in Air Products' electronics business, and a negative currency impact, as the dollar has strengthened, the company said.

($1 = €0.73)

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By: Hilde Ovrebekk
+44 20 8652 3214

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