(RTTNews) - Industrial and medical gases distributor Airgas, Inc. (ARG: News ) reported Thursday a decline in second-quarter profit, reflecting a 17% decrease in sales. On an adjusted basis, earnings per share came in above analysts' estimate by a penny. The company also provided earnings guidance for the third quarter and revised its full year outlook.

For the second quarter, net earnings dropped to $54.54 million or $0.65 per share from $72.82 million or $0.86 per share in the previous year. The results of the latest quarter included loss on debt extinguishment of $2.01 million or $0.02 a share and multi-employer pension plan withdrawal charge of $0.01 a share.

Excluding items, earnings were $0.68 per share. On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.67 per share for the second quarter. Analysts' estimates typically exclude special items.

Airgas noted that cost reductions and operating efficiencies helped reduce the year-over-year decline in operating margin to 11.4% from 12.5% a year ago. Operating income dropped year-over-year to $109.82 million from $144.98 million.

Net sales for the period decreased 17% to $962.27 million from $1.16 billion in the second quarter of the prior fiscal year. Ten analysts were expecting revenue of $999.17 million in the second quarter.

Revenue from gas and rent reduced to $625.39 million from $704.35 million, and Hardgoods sales dipped to $336.87 million from $457.56 million in the corresponding period of fiscal 2008.
Total same-store sales declined 19%, with hardgoods down 27% and gas and rent down 14%. Acquisitions contributed 2% sales growth in the quarter, Airgas revealed.

Commenting on the results, Peter McCausland, Airgas' Chief Executive, said, "Difficult conditions were broad-based across our geographies and customer segments. Consistent with recent quarters, our manufacturing customers suffered the deepest declines while our medical business showed the most resilience."

Airgas implemented $45 million of annual expense reductions between December 2008 and March 2009, which resulted in benefits for the first and second quarter. Further, the company implemented $12 million of annual expense reductions in the second quarter and expects full run-rate benefits show up in beginning of the third quarter. Airgas also sees $10 million of annual savings in fiscal 2010 from ongoing efficiency initiatives.

For the first half of fiscal 2009, net earnings slid to $109.36 million or $1.31 per share from $141.70 million or $1.67 per share in fiscal 2008. Sales decreased to $1.94 billion from $2.28 billion in the same period last year.

To receive FREE breaking news email alerts for Airgas Inc and others in your portfolio

 1   2   Next Page