Industrial gas producer and supplier, Praxair Inc. (PX) recently opted for raising funds from the market through issuance of $500 million principal amount of Notes due to mature on August 15, 2022. The notes, expected to yield 2.224% at maturity, were offered at 99.785% of the principal amount.
The notes carry a coupon rate of 2.2% to be paid semi-annually by the company, with the first installment accruing on February 15, 2013. The notes carry an A2 rating from Moody’s and A from S&P.
In the recently reported second quarter 2012 results, the company reported a 7.1% sequential drop in its long-term debt balance (net of current portions) which settled at approximately $6.0 billion. Net interest expense in the quarter came in at $33 million.
Also, the quarter’s adjusted earnings per share came in at $1.42, up 3.0% from $1.38 reported in the year-ago quarter. Earnings were roughly at the mid-point of management’s guidance range of $1.40-$1.45 and in line with the Zacks Consensus Estimate of $1.42.
Net revenue plummeted 2% year over year to roughly $2.8 billion, due primarily to a 2% unit volume improvement, a 2% positive price impact and 2% positive impact from acquisitions. These were, however, offset by a 6% negative currency translation impact.
The current Zacks Consensus Estimate for the third quarter of 2012 is $1.40, representing a year-over-year decrease of 0.36%. Estimates for the fiscal years 2012 and 2013 are $5.65 and $6.45, reflecting annual growth of 4.05% and 14.14%, respectively.
We maintain a Neutral recommendation on Praxair. The stock also carries a Zacks #4 Rank, implying a short-term (1-3 months) Sell rating.
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