Airgas (ARG) Q2 Earnings & Revenues Beat Expectations

Airgas, Inc. (ARG) posted earnings of $1.30 a share in second-quarter fiscal 2015 (ended Sep 30, 2014), up 4% from $1.25 reported in the year-ago quarter. Results are in line with the company’s guidance range of $1.27–$1.32 and beat the Zacks Consensus Estimate by a cent.

Revenues

Revenues in the reported quarter rose 6% year over year to $1.36 billion and surpassed the Zacks Consensus Estimate of $1.33 billion. Acquisitions aided sales growth of 2%. Organic sales were up 4%, with gas and rent increasing 3%, while hardgoods results were up 6%. Sales in the organic segment surpassed the company’s expectation on the back of strong growth in hardgoods.

Airgas, Inc - Earnings Surprise | FindTheBest

Costs and Margins

Costs of goods sold went up 6.7% year over year to $600.5 million. Gross profits rose 5.3% to $757 million from $719 million in the year-ago quarter. Consequently, gross margin decreased 4 basis points (bps) to 55.7%.

Selling, distribution and administrative expenses amounted to $500.4 million, up 5% year over year because of increased costs associated with acquisition.

Normal expense inflation, as well as expenses associated with Airgas’ investments in long-term strategic growth initiatives, including its e-Business platform and continued expansion of its telesales business through Airgas Total Access, also contributed to the increase.

Operating income increased 4% to $175.8 million from $168.8 million in the year-ago quarter. Operating margin contracted 30 bps to 12.9% in the quarter due to shift in sales toward hardgoods.

Financial Position

As of Sep 30, 2014, cash and cash equivalents amounted to $65.7 million versus $69.6 million as of Mar 31, 2014. Adjusted cash flow from operations for the reported quarter was $356 million, a year-over-year fall of 10%. Free cash flow in the reported quarter was $147 million, down 38% year over year. Long-term debt increased to $2 billion as of Sep 30, 2014, from $1.7 billion as of Mar 31, 2014.

Guidance

Airgas expects earnings per share in the range of $1.20 to $1.25 for the third quarter of fiscal 2015, which reflects an increase of 2% to 6% over prior-year earnings per share of $1.18. The company expects organic sales growth in mid single digits for the quarter.

For fiscal 2015, the company expects earnings per share in the range of $5.00 to $5.10, representing a 6% to 8% year-over-year rise. The guidance includes 9–11 cents per share of negative year-over-year impact from variable compensation reset following a below-budget year. Airgas currently expects its refrigerants business to make a slightly favorable contribution to its year-over-year earnings per share in fiscal 2015.

Airgas plans to improve its sales through Total Access and new e-Business platforms. The company expects residential construction activity to increase in the near future, driven by strong growth in rental welder business and increasing demand for staging of materials for energy-related construction projects. In addition, stability in mining and heavy manufacturing sectors will drive sales growth for the company.

Radnor, PA-based Airgas, through its subsidiaries, distributes industrial, medical and specialty gases as well as hardgoods in the U.S. The company also markets its products and services through e-Business, catalog and telesales channels.

Airgas currently carries a Zacks Rank #4 (Sell).

Other chemical-diversified stocks worth a look include Westlake Chemical Corp. (WLK) sporting a Zacks Rank #1 (Strong Buy) and LyondellBasell Industries N.V. (LYB) and Globe Specialty Metals, Inc. (GSM), each holding a Zacks Rank #2 (Buy).

Other chemical-diversified stocks worth a look include Westlake Chemical Corp. (WLK) sporting a Zacks Rank #1 (Strong Buy), and LyondellBasell Industries N.V. (LYB) and Globe Specialty Metals, Inc. (GSM), each holding a Zacks Rank #2 (Buy).Airgas, Inc. (ARG) posted earnings of $1.30 a share in second-quarter fiscal 2015 (ended Sep 30, 2014), up 4% from $1.25 reported in the year-ago quarter. Results are in line with the company’s guidance range of $1.27–$1.32 and beat the Zacks Consensus Estimate by a cent.

Revenues

Revenues in the reported quarter rose 6% year over year to $1.36 billion and surpassed the Zacks Consensus Estimate of $1.33 billion. Acquisitions aided sales growth of 2%. Organic sales were up 4%, with gas and rent increasing 3%, while hardgoods results were up 6%. Sales in the organic segment surpassed the company’s expectation on the back of strong growth in hardgoods.

Airgas, Inc - Earnings Surprise |

Airgas, Inc - Earnings Surprise | FindTheBest

Costs and Margins

Costs of goods sold went up 6.7% year over year to $600.5 million. Gross profits rose 5.3% to $757 million from $719 million in the year-ago quarter. Consequently, gross margin decreased 4 basis points (bps) to 55.7%.

Selling, distribution and administrative expenses amounted to $500.4 million, up 5% year over year because of increased costs associated with acquisition. Normal expense inflation, as well as expenses associated with Airgas’ investments in long-term strategic growth initiatives, including its e-Business platform and continued expansion of its telesales business through Airgas Total Access, also contributed to the increase.

Operating income increased 4% to $175.8 million from $168.8 million in the year-ago quarter. Operating margin contracted 30 bps to 12.9% in the quarter due to shift in sales toward hardgoods.

Financial Position

As of Sep 30, 2014, cash and cash equivalents amounted to $65.7 million versus $69.6 million as of Mar 31, 2014. Adjusted cash flow from operations for the reported quarter was $356 million, a year-over-year fall of 10%. Free cash flow in the reported quarter was $147 million, down 38% year over year. Long-term debt increased to $2 billion as of Sep 30, 2014, from $1.7 billion as of Mar 31, 2014.

Guidance

Airgas expects earnings per share in the range of $1.20 to $1.25 for the third quarter of fiscal 2015, which reflects an increase of 2% to 6% over prior-year earnings per share of $1.18. The company expects organic sales growth in mid single digits for the quarter.

For fiscal 2015, the company expects earnings per share in the range of $5.00 to $5.10, representing a 6% to 8% year-over-year rise. The guidance includes 9–11 cents per share of negative year-over-year impact from variable compensation reset following a below-budget year. Airgas currently expects its refrigerants business to make a slightly favorable contribution to its year-over-year earnings per share in fiscal 2015.

Airgas plans to improve its sales through Total Access and new e-Business platforms. The company expects residential construction activity to increase in the near future, driven by strong growth in rental welder business and increasing demand for staging of materials for energy-related construction projects. In addition, stability in mining and heavy manufacturing sectors will drive sales growth for the company.

Radnor, PA-based Airgas, through its subsidiaries, distributes industrial, medical and specialty gases as well as hardgoods in the U.S. The company also markets its products and services through e-Business, catalog and telesales channels.

Airgas currently carries a Zacks Rank #4 (Sell).

Other chemical-diversified stocks worth a look include Westlake Chemical Corp. (WLK) sporting a Zacks Rank #1 (Strong Buy), and LyondellBasell Industries N.V. (LYB) and Globe Specialty Metals, Inc. (GSM), each holding a Zacks Rank #2 (Buy).

Airgas, Inc. (ARG) posted earnings of $1.30 a share in second-quarter fiscal 2015 (ended Sep 30, 2014), up 4% from $1.25 reported in the year-ago quarter. Results are in line with the company’s guidance range of $1.27–$1.32 and beat the Zacks Consensus Estimate by a cent.

Revenues

Revenues in the reported quarter rose 6% year over year to $1.36 billion and surpassed the Zacks Consensus Estimate of $1.33 billion. Acquisitions aided sales growth of 2%. Organic sales were up 4%, with gas and rent increasing 3%, while hardgoods results were up 6%. Sales in the organic segment surpassed the company’s expectation on the back of strong growth in hardgoods.

Costs and Margins

Costs of goods sold went up 6.7% year over year to $600.5 million. Gross profits rose 5.3% to $757 million from $719 million in the year-ago quarter. Consequently, gross margin decreased 4 basis points (bps) to 55.7%.

Selling, distribution and administrative expenses amounted to $500.4 million, up 5% year over year because of increased costs associated with acquisition. Normal expense inflation, as well as expenses associated with Airgas’ investments in long-term strategic growth initiatives, including its e-Business platform and continued expansion of its telesales business through Airgas Total Access, also contributed to the increase.

Operating income increased 4% to $175.8 million from $168.8 million in the year-ago quarter. Operating margin contracted 30 bps to 12.9% in the quarter due to shift in sales toward hardgoods.

Financial Position

As of Sep 30, 2014, cash and cash equivalents amounted to $65.7 million versus $69.6 million as of Mar 31, 2014. Adjusted cash flow from operations for the reported quarter was $356 million, a year-over-year fall of 10%. Free cash flow in the reported quarter was $147 million, down 38% year over year. Long-term debt increased to $2 billion as of Sep 30, 2014, from $1.7 billion as of Mar 31, 2014.

Guidance

Airgas expects earnings per share in the range of $1.20 to $1.25 for the third quarter of fiscal 2015, which reflects an increase of 2% to 6% over prior-year earnings per share of $1.18. The company expects organic sales growth in mid single digits for the quarter.

For fiscal 2015, the company expects earnings per share in the range of $5.00 to $5.10, representing a 6% to 8% year-over-year rise. The guidance includes 9–11 cents per share of negative year-over-year impact from variable compensation reset following a below-budget year. Airgas currently expects its refrigerants business to make a slightly favorable contribution to its year-over-year earnings per share in fiscal 2015.

Airgas plans to improve its sales through Total Access and new e-Business platforms. The company expects residential construction activity to increase in the near future, driven by strong growth in rental welder business and increasing demand for staging of materials for energy-related construction projects. In addition, stability in mining and heavy manufacturing sectors will drive sales growth for the company.

Radnor, PA-based Airgas, through its subsidiaries, distributes industrial, medical and specialty gases as well as hardgoods in the U.S. The company also markets its products and services through e-Business, catalog and telesales channels.

Airgas currently carries a Zacks Rank #4 (Sell).

Other chemical-diversified stocks worth a look include Westlake Chemical Corp. (WLK) sporting a Zacks Rank #1 (Strong Buy), and LyondellBasell Industries N.V. (LYB) and Globe Specialty Metals, Inc. (GSM), each holding a Zacks Rank #2 (Buy).

Airgas, Inc. (ARG) posted earnings of $1.30 a share in second-quarter fiscal 2015 (ended Sep 30, 2014), up 4% from $1.25 reported in the year-ago quarter. Results are in line with the company’s guidance range of $1.27–$1.32 and beat the Zacks Consensus Estimate by a cent.

Revenues

Revenues in the reported quarter rose 6% year over year to $1.36 billion and surpassed the Zacks Consensus Estimate of $1.33 billion. Acquisitions aided sales growth of 2%. Organic sales were up 4%, with gas and rent increasing 3%, while hardgoods results were up 6%. Sales in the organic segment surpassed the company’s expectation on the back of strong growth in hardgoods.

Costs and Margins

Costs of goods sold went up 6.7% year over year to $600.5 million. Gross profits rose 5.3% to $757 million from $719 million in the year-ago quarter. Consequently, gross margin decreased 4 basis points (bps) to 55.7%.

Selling, distribution and administrative expenses amounted to $500.4 million, up 5% year over year because of increased costs associated with acquisition. Normal expense inflation, as well as expenses associated with Airgas’ investments in long-term strategic growth initiatives, including its e-Business platform and continued expansion of its telesales business through Airgas Total Access, also contributed to the increase.

Operating income increased 4% to $175.8 million from $168.8 million in the year-ago quarter. Operating margin contracted 30 bps to 12.9% in the quarter due to shift in sales toward hardgoods.

Financial Position

As of Sep 30, 2014, cash and cash equivalents amounted to $65.7 million versus $69.6 million as of Mar 31, 2014. Adjusted cash flow from operations for the reported quarter was $356 million, a year-over-year fall of 10%. Free cash flow in the reported quarter was $147 million, down 38% year over year. Long-term debt increased to $2 billion as of Sep 30, 2014, from $1.7 billion as of Mar 31, 2014.

Guidance

Airgas expects earnings per share in the range of $1.20 to $1.25 for the third quarter of fiscal 2015, which reflects an increase of 2% to 6% over prior-year earnings per share of $1.18. The company expects organic sales growth in mid single digits for the quarter.

For fiscal 2015, the company expects earnings per share in the range of $5.00 to $5.10, representing a 6% to 8% year-over-year rise. The guidance includes 9–11 cents per share of negative year-over-year impact from variable compensation reset following a below-budget year. Airgas currently expects its refrigerants business to make a slightly favorable contribution to its year-over-year earnings per share in fiscal 2015.

Airgas plans to improve its sales through Total Access and new e-Business platforms. The company expects residential construction activity to increase in the near future, driven by strong growth in rental welder business and increasing demand for staging of materials for energy-related construction projects. In addition, stability in mining and heavy manufacturing sectors will drive sales growth for the company.

Radnor, PA-based Airgas, through its subsidiaries, distributes industrial, medical and specialty gases as well as hardgoods in the U.S. The company also markets its products and services through e-Business, catalog and telesales channels.

Airgas currently carries a Zacks Rank #4 (Sell).

Other chemical-diversified stocks worth a look include Westlake Chemical Corp. (WLK) sporting a Zacks Rank #1 (Strong Buy), and LyondellBasell Industries N.V. (LYB) and Globe Specialty Metals, Inc. (GSM), each holding a Zacks Rank #2 (Buy).

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