Air Products (APD) to Post Q2 Earnings: What's in Store?

Air Products and Chemicals, Inc. APD is slated to release second-quarter fiscal 2021 results before the bell on May 10. The company is expected to have gained from pricing and productivity initiatives in the quarter. However, the impacts of the coronavirus pandemic and some volume pressure are likely to get reflected in its quarterly performance.

The industrial gases giant missed the Zacks Consensus Estimate for earnings in all the last four quarters. It has a trailing four-quarter negative earnings surprise of 1.86%, on average. The company delivered a negative earnings surprise of around 3.2% in the last reported quarter.

Shares of the company have gained 29% in the past year compared with 75.2% rise of the industry.

Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for Air Products’ second-quarter revenues is currently pegged at $2,359 million, suggesting a rise of 6.5% year over year.

The Zacks Consensus Estimate for revenues for the Industrial Gases — Americas segment is currently pegged at $956 million, calling for a rise of 2.5% year over year. The consensus mark for revenues in the Industrial Gases — Asia segment is pegged at $697 million, which suggests 6% year-over-year growth.

The Zacks Consensus Estimate for revenues in the Industrial Gases — EMEA segment stands at $544 million, indicating a 10.3% year-over-year increase.

The consensus mark for revenues for the Industrial Gases — Global segment is pegged at $84 million, which indicates a rise of 6.3% year over year.

Some Factors at Play

Air Products’ productivity actions, investments in high-return projects and benefits of acquisitions and new plants are expected to get reflected in the company’s results in the to-be-reported quarter.

Moreover, Air Products is boosting productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions. Benefits from additional productivity and cost-improvement programs are likely to have supported margins in the fiscal second quarter.

However,it is likely to have been impacted by some volume pressure in the second quarter. The company’s results are likely to reflect the unfavorable impacts from the coronavirus pandemic. Notably, the company’s first-quarter revenues and earnings were impacted by lower volumes due to the pandemic. Some volume pressure is likely to have continued in the fiscal second quarter amid disruptions from the pandemic. The company is likely to have witnessed weak packaged gases volumes in Europe and softness in merchant volumes in the Americas in the quarter.

Air Products and Chemicals, Inc. Price and EPS Surprise

Air Products and Chemicals, Inc. Price and EPS Surprise

Air Products and Chemicals, Inc. price-eps-surprise | Air Products and Chemicals, Inc. Quote

Zacks Model

Our proven model does not conclusively predict an earnings beat for Air Products this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Air Products is -1.09%. The Zacks Consensus Estimate for earnings for the fiscal second quarter is currently pegged at $2.13. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Air Products currently carries a Zacks Rank #4 (Sell).

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Koppers Holdings, Inc. KOP, scheduled to release earnings on May 7, has an Earnings ESP of +5.26% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Brigham Minerals,Inc. MNRL, scheduled to release earnings on May 7, has an Earnings ESP of +8.00% and sports a Zacks Rank #1.

Verso Corporation VRS, scheduled to release earnings on May 7, has an Earnings ESP of +110.53% and carries a Zacks Rank #3.

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Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report

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