Air Products’ Q2 FY25 Results: EPS and Revenue Fall Short of Expectations

Air Products (NYSE: APD) recently released its financial results for the second quarter of fiscal year 2025. The report highlights key performance metrics, compares them against expectations, and provides updated guidance for the upcoming quarters. This article delves into the company’s current performance and future outlook.

APD Reports Q2 FY25 with $2.69 EPS and $2.9 Billion in Revenue

Air Products’ financial results for the second quarter of fiscal year 2025 presented a mixed bag of outcomes. The company reported a GAAP loss per share of $7.77 and a net loss of $1.7 billion, primarily due to a significant after-tax charge of $2.3 billion related to business and asset actions. On an adjusted basis, however, the earnings per share (EPS) stood at $2.69, which fell short of the market expectations of $2.84. This 6% decrease from the prior year’s adjusted EPS was attributed mainly to lower volumes and increased costs, partially offset by favorable pricing in non-helium merchant products. Adjusted EBITDA also saw a decline, registering at $1.2 billion, down 3% from the previous year.

Despite these setbacks, Air Products managed to maintain stable sales figures, with the second-quarter revenue reported at $2.9 billion, slightly below the anticipated $2.94 billion. The flat sales performance was a result of higher energy cost pass-through and pricing adjustments, which were counterbalanced by lower volumes and unfavorable currency impacts. Specifically, the divestiture of the LNG business in September 2024 and reduced global helium demand contributed to the volume decline, while inflation and maintenance expenses drove up costs.

Regionally, the Americas saw a 3% increase in sales to $1.3 billion, attributed to higher energy costs and pricing. However, operating income decreased by 2%, affected by maintenance costs. In Asia, sales decreased by 1% to $774 million, with operating income falling by 6% due to lower helium pricing and currency effects. Europe experienced a 9% sales increase to $727 million, but operating income decreased by 3% due to higher costs and an unfavorable business mix.

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Air Products Revises Full-Year Fiscal 2025 Guidance

Looking ahead, Air Products has revised its full-year fiscal 2025 adjusted EPS guidance to a range of $11.85 to $12.15, with third-quarter guidance set between $2.90 and $3.00. This adjustment reflects the company’s cautious optimism despite the challenges faced in the second quarter. The anticipated capital expenditures for the fiscal year are projected to be around $5 billion, underscoring the company’s commitment to strategic investments and growth initiatives.

Management has emphasized the unpredictability of future events and their potential impact on GAAP EPS, making it challenging to provide a precise reconciliation of forecasted adjusted EPS to a comparable GAAP range. Nevertheless, the company remains focused on executing its strategic plans, including exiting certain projects to streamline operations and concentrate resources on high-value opportunities. These actions are expected to enhance shareholder value in the long run.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.