Air Products Hikes Product Prices - Analyst Blog

Air Products & Chemicals Inc. APD will hike prices of select Ancamide, Ancamine, and Sunmide epoxy curing agents and select Nourybond adhesion promoters worldwide by up to 20 cents per kilogram. The price hike for these products will be effective from Jun 1, 2014, or per contracts.

The price increase is aimed to recover higher operating and raw material costs, including the recent price increases of tetraethylenepentamine (TEPA).

On Apr 23, Air Products posted its second-quarter fiscal 2014 (ended Mar 31, 2014) results. The company's earnings from continued operations of $1.32 a share in the quarter were down roughly 4% from $1.37 a share in the year-ago quarter. The results also missed the Zacks Consensus Estimate of $1.35 per share.

Higher underlying volumes and a planned execution of maintenance outages despite adverse weather conditions helped Air Products to deliver earnings within the guided range. However, net income from continuing operations decreased 2% to $283.5 million in the quarter from $289.3 recorded in the last-year quarter.

Revenues rose 4% year over year to $2,582 million, beating the Zacks Consensus Estimate of $2,564 million. Higher energy pass-through and stronger underlying volumes in the Merchant Gases as well as the Electronics and Performance Materials segments boosted sales. Underlying sales, barring the company's exit from the Polyurethane Intermediates PUI business, rose 2% year over year.

Air Products revised its earnings guidance for fiscal 2014 and now anticipates earnings from continuing operations to be in the range of $5.70–$5.85 per share versus its previous guidance of $5.70–$5.90 per share. For the third quarter, earnings from continuing operations are expected in the band of $1.42–$1.47 per share. The company has reaffirmed its capital expenditure forecast of roughly $2 billion for fiscal 2014.

Air Products expects its strategic actions, including productivity improvement, better asset utilization, disciplined project execution and cost management initiatives to drive earnings in fiscal 2014. The company anticipates stronger momentum in the second half of the year.

Air Products currently holds a Zacks Rank #3 (Hold).

Other companies in the chemical industry worth considering are Compass Minerals International Inc. CMP, Celanese Corp. CE and Kronos Worldwide, Inc. KRO. While Compass Minerals holds a Zacks Rank #1 (Strong Buy), both Celanese and Kronos retain a Zacks Rank #2 (Buy).