Air Products & Chemicals Inc. announced better-than-expected fiscal third-quarter 2025 results, with adjusted earnings per share (EPS) of $3.09, beating the $2.98 estimate, and sales of $3.02 billion, surpassing the $2.96 billion estimate.

Third-quarter sales climbed 1% year over year, driven by higher energy cost pass-through, favorable pricing, and currency impacts. These largely offset volume declines from the September 2024 LNG business sale, lower global helium demand, and previously exited projects.

GAAP EPS rose 4% to $3.24, with GAAP operating income up 7% to $791 million, benefiting from asset sales. Adjusted operating income was flat at $741 million, reflecting strong base business performance despite the portfolio adjustments.

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Air Products’ Americas sales rose 2% to $1.3 billion, driven by higher energy pass-through and pricing, though offset by 6% lower volumes due to project exits and weaker helium demand. Operating income dropped 4% to $374 million, with the margin falling 200 basis points to 29.7%.

In Asia, sales increased 3% to $810 million on higher volumes, energy pass-through, and favorable currency, despite a 1% pricing decline. Operating income grew 8% to $217 million, and the margin improved 150 basis points to 26.8% due to productivity.

Europe’s sales surged 11% to $771 million, fueled by favorable currency, higher volumes, and stronger pricing. Operating income rose 10% to $225 million, with the margin slightly down 30 basis points to 29.2%.

Income from Middle East and India equity affiliates decreased 4% to $86 million, mainly from a Saudi Arabian affiliate.

Corporate and other sales plummeted 39% to $143 million, and the operating loss widened 46% to $83 million, largely due to the September 2024 LNG business sale.

Chief Executive Officer Eduardo Menezes said, “The Air Products team delivered solid results this quarter that exceeded guidance and were higher than last year on a comparable basis, excluding the impact of the LNG sale. We are staying focused on our cost productivity efforts, pricing, operational excellence and capital discipline.”

Air Products announced an additional $24.1 million (7 cents per share) charge in the third quarter for ongoing clean energy project exits. This follows a $2.9 billion charge in the second quarter to streamline its project backlog.

The company also incurred $25.0 million (8 cents per share) in costs related to a proxy contest with Mantle Ridge. These expenses were partially offset by gains from asset sales, including $67.3 million (23 cents per share) from a Singapore subsidiary and $31.3 million (11 cents per share) from an England office.

Separately, the de-designation of interest rate swaps for the NEOM Green Hydrogen Project means unrealized gains or losses are now reported as non-operating income or expense.

Outlook

Air Products has narrowed its full-year fiscal 2025 adjusted EPS guidance to a range of $11.90 to $12.10. This revised outlook aligns closely with the consensus analyst estimate of $11.98, reflecting the company’s updated projections for the remainder of the fiscal year.

For the upcoming fiscal fourth quarter, Air Products expects adjusted EPS to be between $3.27 and $3.47. This guidance is slightly below the current analyst consensus of $3.48 for the period. Air Products continues to project approximately $5 billion in capital expenditures for fiscal 2025.

Price Action: APD shares are trading lower by 1.09% to 287.21 at Thursday’s last check.

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