Air Products & Chemicals Inc. (APD) has reported a 17.55 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $299.80 million, or $1.37 a share in the quarter, compared with $363.60 million, or $1.67 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $322 million, or $1.47 a share compared with $292.90 million or $1.35 a share, a year ago.
Revenue during the quarter went up marginally by 0.87 percent to $1,882.50 million from $1,866.30 million in the previous year period. Gross margin for the quarter contracted 58 basis points over the previous year period to 29.98 percent. Total expenses were 82.57 percent of quarterly revenues, up from 80.04 percent for the same period last year. That has resulted in a contraction of 253 basis points in operating margin to 17.43 percent.
Operating income for the quarter was $328.10 million, compared with $372.50 million in the previous year period.
However, the adjusted operating income for the quarter stood at $408.30 million compared to $384.50 million in the prior year period. At the same time, adjusted operating margin improved 109 basis points in the quarter to 21.69 percent from 20.60 percent in the last year period.
Commenting on the results for the quarter, Seifi Ghasemi, chairman, president and chief executive officer, said, "This was another quarter of strong operating performance by our dedicated employees who are making Air Products the safest and most profitable industrial gases company in the world. We increased adjusted EPS by nine percent over the previous year, improved both adjusted operating and adjusted EBITDA margins, and increased our adjusted ROCE by 180 basis points to 12.7 percent."
For financial year 2017, Air Products & Chemicals Inc. projects diluted earnings per share to be in the range of $6 to $6.25 on adjusted basis.
Operating cash flow improves significantly
Air Products & Chemicals Inc. has generated cash of $574.30 million from operating activities during the quarter, up 44.59 percent or $177.10 million, when compared with the last year period.
The company has spent $238.10 million cash to meet investing activities during the quarter as against cash outgo of $215.70 million in the last year period. It has incurred capital expenditure of $227.80 million on net basis during the quarter, up 4.69 percent or $10.20 million from year ago period.
The company has spent $974.50 million cash to carry out financing activities during the quarter as against cash outgo of $200.20 million in the last year period.
Working capital turns positive
Working capital of Air Products & Chemicals Inc. has turned positive to $619 million on Dec. 31, 2016 from negative $793.40 million on Dec. 31, 2015. Current ratio was at 1.21 as on Dec. 31, 2016, up from 0.78 on Dec. 31, 2015.
Days sales outstanding went down to 60 days for the quarter compared with 66 days for the same period last year.
Days inventory outstanding has decreased to 12 days for the quarter compared with 47 days for the previous year period.
Debt comes down significantly
Air Products & Chemicals Inc. has recorded a decline in total debt over the last one year. It stood at $4,318.40 million as on Dec. 31, 2016, down 25.77 percent or $1,499.40 million from $5,817.80 million on Dec. 31, 2015. Total debt was 27.06 percent of total assets as on Dec. 31, 2016, compared with 33.71 percent on Dec. 31, 2015. Debt to equity ratio was at 0.59 as on Dec. 31, 2016, down from 0.78 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 11.12 for the quarter from 16.78 for the same period last year.
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