Industrial chemical and gas producer Air Products & Chemicals, Inc. (APD) reported Tuesday a decline in second-quarter profit, despite higher sales. Looking ahead, the company trimmed its fiscal 2013 earnings forecast, below analysts' estimates, citing weakness in the second quarter.
In its second quarter, net income attributable to the company declined to $290.4 million from last year's $296 million. Earnings per share remained at the prior year's level of $1.38.
On a continuing operations basis, income increased to $298.5 million from last year's $285.2 million, and earnings per share improved to $1.37 from $1.30 a year ago.
On average, 18 analysts polled by Thomson Reuters expected earnings of $1.37 per share for the quarter. Analysts' estimates typically exclude special items.
Quarterly sales increased 6 percent to $2.48 billion from last year's $2.34 billion, while analysts projected sales of $2.59 billion. Acquisitions contributed six percent to sales growth. Underlying sales declined 2 percent due to its earlier announced decision to exit the Polyurethane Intermediates business.
John McGlade, chairman, president and chief executive officer, said, "Good cost performance helped offset weaker than expected volumes in the second quarter. Global economic growth continued to be a challenge, with a slower U.S., contraction in Europe, softness in China, and an electronics market much weaker than we expected."
Further, the company said its quarterly dividend increased by 11 percent.
Looking ahead, Air Products expects third-quarter adjusted earnings per share from continuing operations to be between $1.33 and $1.38 per share. Analysts expect earnings of $1.50 per share.
For fiscal 2013, the company now projects earnings from continuing operations in a range of $5.45 to $5.60 per share, lower than previous forecast of $5.70 to $5.90 per share. Analysts look for full-year earnings of $5.76 per share.
McGlade said, "Given the weakness we saw coming out of Q2, we are tempering our expectations for economic growth in the second half of our fiscal year. In light of our view of continuing slow growth, we are actively assessing whether there are additional actions we can take that would result in increased value to our shareholders."
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