Air Prods & Chems Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Air Prods & Chems (NYSE:APD) will unveil its latest earnings on Tuesday, July 24, 2012. Air Products and Chemicals is a global supplier of gases and chemicals for industrial use. It provides customers in the technology, energy, and healthcare sectors with a variety of services and solutions, including atmospheric gases and semiconductor materials.

Air Prods & Chems Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.41 per share, a decline of 3.4% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.51. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.41 during the last month. For the year, analysts are projecting net income of $5.52 per share, a decline of 3.7% from last year.

Past Earnings Performance: The company fell short of estimates last quarter after being in line with forecasts the quarter prior. In the second quarter, it reported profit of $1.31 per share versus a mean estimate of $1.33. Two quarters ago, it reported net income of $1.36 per share.

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Stock Price Performance: Between April 23, 2012 and July 18, 2012, the stock price fell $7.19 (-8.1%), from $88.73 to $81.54. The stock price saw one of its best stretches over the last year between March 12, 2012 and March 19, 2012, when shares rose for six straight days, increasing 3% (+$2.68) over that span. It saw one of its worst periods between July 21, 2011 and August 2, 2011 when shares fell for nine straight days, dropping 10.7% (-$10.18) over that span.

Wall St. Revenue Expectations: Analysts predict a decline of 4.7% in revenue from the year-earlier quarter to $2.46 billion.

A Look Back: In the second quarter, profit fell 2.7% to $296 million ($1.38 a share) from $304.3 million ($1.39 a share) the year earlier, missing analyst expectations. Revenue fell 6.3% to $2.34 billion from $2.5 billion.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 14.5% in the third quarter of the last fiscal year, 11.1% in the fourth quarter of the last fiscal year and 1.3%in the first quarter before dropping in the second quarter.

An income boost this time around would be welcome news after profit declines in the past two quarters. Net income dropped 7.6% in the first quarter and then again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.32 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.36 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 8.7% to $2.54 billion while assets rose 5.2% to $3.34 billion.

Analyst Ratings: There are nine out of 15 analysts surveyed (60%) rating Air Prods & Chems a buy.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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