Air Products & Chemicals Inc (NYSE:APD) reported first-quarter fiscal 2026 results on Friday, delivering an earnings and revenue beat that pushed the stock higher in early trading.

The industrial gases company posted revenue of $3.103 billion, up 6% from $2.932 billion a year earlier and above the $3.051 billion analyst estimate.

Adjusted EPS was $3.16, up 10% year over year and exceeding the top end of company guidance. The result beat the $3.04 analyst estimate.

Sales growth reflected higher energy cost pass-through, favorable currency, and pricing. Volumes were flat as higher on-site volumes were offset by lower helium demand and a significant, non-recurring helium sale in the Americas segment in the prior year.

GAAP operating income rose 14% to $735 million. GAAP operating margin increased 170 basis points to 23.7%, despite an approximate 50-basis-point headwind from higher energy cost pass-through in the Americas segment. GAAP EPS was $3.04, up from $2.77.

On a non-GAAP basis, adjusted operating income increased 12% to $757 million. Adjusted operating margin rose 140 basis points to 24.4%.

Chief Executive Officer Eduardo Menezes said, "We had strong results from the base business, with a 10% increase in adjusted EPS compared to the prior year period, and also posted a 12% improvement in adjusted operating income despite helium headwinds in the quarter. This is a solid start as the Air Products team continues to focus on unlocking earnings growth, optimizing large projects, and maintaining capital discipline."

Segment Performance

Americas sales of $1.3 billion were up 4% from the prior year, as 6% higher energy cost pass-through and 2% higher pricing were partially offset by 4% lower volumes. Operating income rose 4% to $404 million, while operating margin was flat at 30.1%.

Asia sales rose 2% to $832 million. Operating income increased 7% to $232 million, and operating margin improved by 140 basis points to 27.9%, driven by productivity improvements and reduced depreciation on gasification assets classified as held for sale.

Europe sales climbed 12% to $782 million. Operating income rose 20% to $224 million, and operating margin expanded 190 basis points to 28.6%.

Middle East and India equity affiliates' income was $85 million, flat year over year. Corporate and other sales increased 21% to $117 million, and operating loss narrowed to $109 million.

Cash Flow and Balance Sheet

Cash provided by operating activities totaled $900.7 million. Cash and cash items ended the quarter at $1.026 billion.

Long-term debt stood at $17.115 billion, with $169.8 million in the current portion of long-term debt and $66.7 million in short-term borrowings.

The company recorded business and asset actions charges of $28.3 million, or $24.6 million after tax, or $0.11 per share, related to project exits announced in fiscal 2025.

Outlook

Air Products affirmed full-year fiscal 2026 adjusted EPS guidance of $12.85 to $13.15, compared with the $12.96 analyst estimate. The company continues to expect fiscal 2026 capital expenditures of approximately $4.0 billion.

Second-quarter adjusted EPS is expected to range from $2.95 to $3.10, versus the $3.02 estimate.

Recent developments include advanced negotiations with Yara International for low-emission ammonia projects, a quarterly dividend increase to $1.81 per share, and NASA supply contracts totaling more than $140 million.

APD Price Action: Air Products shares were up 0.67% at $257.74 during premarket trading on Friday, according to Benzinga Pro data.

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