The Rising Influence of Rising Affluence

[DewDiligence]

APD Reports FY1Q11 Results

[APD’s shares have been pressured to some degree by the hostile offer for ARG, but this saga is finally coming to an end. APD issued a final offer of $70/sh in December (#msg-57589823), which is not a bluff, IMO.

Meanwhile, APD has been putting up some solid numbers in all of its business segments. In FY1Q11, revenue was $2.39B, +10% YoY and non-GAAP EPS (excluding $0.12/sh of costs related to the hostile offer for ARG) was $1.35, +16% YoY. The EPS guidance for FY2Q11 and full-year FY2011, respectively, is $1.36-1.40 and $5.55-5.70; the lower bound of the full-year range was just raised by $0.05. (APD’s own PR on the quarterly results is at http://sec.gov/Archives/edgar/data/2969/000119312511011560/dex991.htm .)

APD is a major beneficiary of The Global Demographic Tailwind for the reasons presented in #msg-53070399 and #msg-46518659 and exemplified in several additional posts on this board.]

http://www.reuters.com/article/idUSN2119577920110121?feedType=RSS&feedName=mergersNews&rpc=43

›Fri Jan 21, 2011 8:19am EST
By Ernest Scheyder

NEW YORK, Jan 21 (Reuters) - Strong industrial gas demand from solar panel and semiconductor makers lifted Air Products and Chemicals Inc's (APD) quarterly profit above expectations and prompted the company to boost its fiscal 2011 forecast.

Both the results and outlook from Air Products, which is seeking to buy rival Airgas Inc (ARG), show that demand for the oxygen, argon and other gases needed for manufacturing and construction remains brisk, a positive sign for the global economy.

"We are well on our way to achieving double-digit earnings growth, improved return on capital and 17 percent operating margins in 2011," Air Products Chief Executive Officer John McGlade said in a statement.

Net income for the first quarter ended Dec. 31 rose to $269 million, or $1.23 per share, from $252 million, or $1.16 per share, a year earlier.

Excluding a $27 million charge from the offer to buy Airgas, earnings per share were $1.35, slightly above the $1.34 that analysts had forecast, according to Thomson Reuters I/B/E/S.

"I thought it was a strong quarter," Monness, Crespi, Hardt & Co analyst Christopher Shaw said. "To see the continued strength is definitely a positive."

Revenue rose 10 percent to $2.39 billion. Analysts expected $2.35 billion.

Sales rose in all of the company's units. In the electronics and performance materials unit, which supplies parts to make semiconductors, solar panels and other electronic gadgets, sales increased 21 percent and operating income rose 42 percent.

Air Products raised the lower end of its fiscal 2011 profit forecast by 5 cents per share to a range of $5.55 to $5.70 per share. Analysts expect $5.65.

"The increased guidance is a good sign because currency has moved against them in the past," Shaw said.

The company forecast second-quarter profit of $1.36 to $1.40 per share. The analysts' average estimate is $1.34.‹