Specialty gas producer Airgas Inc. (ARG), Thursday reported a decline in fourth-quarter profit, due mainly to higher income tax spend, which offset a modest growth in sales. However, quarterly earnings topped Wall Street estimates, while revenues were in line with expectations.
Moving forward, Airgas provided some soft earnings outlook for the first quarter and fiscal year 2014, citing economic uncertainty and moderation in business conditions.
Airgas supplies industrial, medical, and specialty gases and related products.
The Radnor, Pennsylvania-based company reported a fourth-quarter net income of $86 million, down from $88 million last year. However, on a per share basis, earnings improved to $1.13 from $1.12, on a lower share count.
Excluding items, adjusted earnings for the quarter were $1.14 per share, compared to $1.11 per share a year ago. On average, 15 analysts polled by Thomson Reuters expected earnings of $1.13 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the quarter edged up two percent to $1.26 billion from $1.24 billion in the prior year. Analysts had a consensus revenue estimate of $1.26 billion for the quarter.
Organic sales in the quarter were flat compared to the prior year, with gas and rent up 4 percent and hardgoods down 5 percent.
Results were offset by income tax expense that rose to $51 million from $42 million last year, when Airgas had a near $5 million benefit related to the merger into a single LLC of the majority of its distribution businesses and a true-up of its foreign tax liabilities.
For the first quarter, Airgas expect earnings in the range of $1.14 to $1.20 per share, while analysts currently estimate earnings of $1.30 per share.
For fiscal year 2014, the company expect earnings in the range of $5.00 to $5.35 per share, while analysts currently forecast a profit of $5.35 per share.
"While uncertainty is likely to persist for our customers in the near term, we remain very optimistic about the long-term prospects for the U.S. manufacturing and energy industries, as well as non-residential construction," said CEO Michael Molinini.
Additionally, Airgas declared a quarterly dividend of $0.48 per common share, an increase of 20 percent, payable June 28 to shareholders of record June 14.
Airgas stock is trading at $95.05, up 1.21%, on a volume of 500 thousand shares on the NYSE.
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