Air Products & Chemicals Inc. (APD) entered into an agreement with Samsung Electronics Co. Ltd. to provide gaseous nitrogen to Samsung Electronics’ fabs in the Hwaseong-Giheung area, Gyeonggi Province, South Korea.
As per the agreement, Air Products will build a new nitrogen plant at its Hwaseong site and an underground pipeline for nitrogen supply to Samsung’s fabs in the Hwaseong-Giheung area, which will go onstream in 2012.
Air Products is the world’s largest supplier of hydrogen and helium and has a leading position in the gases business. The company expects to build purification and liquid nitrogen backup systems in the coming years.
In January, Air Products announced its first-quarter 2011 earnings results, which exceeded the Zacks Consensus Estimate. Net income was $275.9 million or $1.25 per share versus $256.8 million or $1.19 per share in the year-ago period.
Reported net income was $296 million or $1.35 a share versus last year’s $252 million or $1.16 per share. Results were a penny above the Zacks Consensus Estimate of $1.34 per share. Solid earnings growth was the result of higher revenues.
First-quarter revenues leaped 10% year over year to about $2.4 million on higher volumes across all business segments due to new contract wins. Results were above the Zacks Consensus Estimate of $2.34 billion.
Air Products raised its fiscal 2011 EPS range to $5.55–$5.70 per share from $5.50–$5.70 per share. The company expects its second-quarter 2011 EPS to be in the range of $1.36–$1.40 per share.
Air Products plans to build, own and operate a new liquid nitrogen production facility in Mooreland, Oklahoma by 2012, which will strengthen its existing leadership position in supplying the region’s oilfield services market.
Air Products also has additional Oklahoma operations in Pryor that produce liquid products for other markets including food, chemicals, metal processing, electronics and medical applications.
Air Products faces stiff competition from Praxair Inc. (PX), L’Air Liquide SA (AIQUY.PK) and The Linde Group (LNAGF.PK).
Currently, Air Products has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long-term (6+ months) Neutral recommendation.
AIR PRODS & CHE (APD): Free Stock Analysis Report
PRAXAIR INC (PX): Free Stock Analysis Report
Zacks Investment Research
