Air Products APD said that it will increase nitrogen production to meet the growing demand of its existing customer in Pyeongtaek city, South Korea. Being a leading integrated gases supplier for the global electronics industry, Air Products has a vast experience in the safe and reliable delivery of gases to various markets.
In 2015, Air Products received a major contract for the supply of its industrial bulk gases and bulk specialty gas supply system. The company is undertaking a multi-phase expansion project which involves multiple high-purity nitrogen plants, hydrogen generators and a liquefier. In this phase, a second nitrogen facility will be constructed. It is the company’s second phase of capacity expansion to supply the semiconductor fab.
Air Products is currently working with some of the world's largest technology companies to develop the next generation of semiconductors and displays for tablets, computers and mobile devices.
Air Products reported adjusted earnings of $2.01 per share for fourth-quarter fiscal 2016, marking the ninth consecutive quarter of double-digit growth. Earnings also beat the Zacks Consensus Estimate of $1.99. Cost of sales for the fourth quarter declined 2.9% year over year to around $1.65 billion. Revenues inched up roughly 0.6% year over year to $2,463 million but missed the Zacks Consensus Estimate of $2,481 million.
Air Products has outperformed the Zacks categorized Chemicals-Diversified industry over the past three months. While the company’s shares gained 10.3% over this period, the industry recorded a gain of 9.4%. Air Products is positioned to capitalize on the cyclical recovery in its core industrial end-markets. Acquisitions and new business deals are expected to continue drive growth. The spin-off of EMD and the sale of PMD, both non-core businesses, will allow the company to direct resources to grow its core and stable industrial gases business.
However, the company’s industrial gases business in the EMEA region is facing pressure from a weak operating environment. The company is also seeing lower volumes in Latin America due to weak demand. Unfavorable currency swings have also hindered its sales for the fourth quarter as well as fiscal 2016. Moreover, the company has a debt-laden balance sheet.
Air Products and Chemicals, Inc. Price and Consensus
Air Products currently carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Some better-ranked companies in the chemical industry include Chemours Company CC, BASF SE BASFY and Kronos Worldwide KRO, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected long-term growth rate of 15.50%.
Kronos has an expected long-term growth of 5%.
BASF has an expected long-term growth of 7.7%.
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