Air Products Reports Strong Fiscal 2016 Fourth Quarter, Full-Year Results

Air Products reported GAAP net income from continuing operations of $402 million, up 16% versus the prior year, and diluted earnings per share (EPS) from continuing operations of $1.84, up 16% versus the prior year, for its fiscal fourth quarter ended September 30, 2016.
 
For the quarter, on a non-GAAP basis, adjusted net income from continuing operations of $441 million was up 11% versus prior year, and adjusted diluted earnings per share from continuing operations of $2.01 was up 10% versus prior year.
 
Fourth quarter sales of $2,463 million increased 1% from the prior year, as 3% higher volumes, primarily driven by the Jazan project, more than offset lower energy pass-through and unfavorable currency impacts of 1% each. Pricing was largely unchanged from the prior year.
 
For the quarter, on a GAAP basis, operating income of $547 million increased 15% and operating margin of 22.2% improved 280 basis points versus prior year.
 
For fiscal 2016, sales of $9.5 billion decreased 4% versus prior year, as 2% higher volumes were more than offset by 3% lower energy pass-through and 3% unfavorable currency. Operating income on a GAAP basis of $2.1 billion increased 23%, and operating margin of 22.1% improved 480 basis points. Adjusted EBITDA of $3.3 billion improved 10%, and adjusted EBITDA margin of 34.4% improved 420 basis points.
 
“The people of Air Products continually strive to be the best in the industrial gases industry, always looking for improvement opportunities and staying focused on what they can control,” Seifi Ghasemi, chairman, president and CEO, said. “They delivered again, with our ninth consecutive quarter of double-digit adjusted earnings growth and improved margins across our segments.
 
“We also successfully completed the spin-off of Versum Materials on October 1 and continue to make progress on the sale of our Performance Materials Division – strategic moves that will give Air Products an even stronger foundation going forward. We continue to be very optimistic about the long-term growth opportunities for our focused industrial gases business. Air Products is now very well positioned to take full advantage of these great opportunities,” he said.
 
Performance Materials sales of $267 million increased 4% over the prior year, as 8% higher volumes were partially offset by 4% lower pricing, driven by lower raw material costs. Operating margin of 25.3% increased 580 basis points and adjusted EBITDA margin of 27.8% increased 550 basis points, driven by productivity and favorable price/raw material balance.