UPDATE 2-Air Products posts lower quarterly profit

* Q4 EPS $1.13 vs. $1.21 year earlier

* Revenue down 22 percent

* Shares down 0.4 percent (Adds analyst commentary, additional earnings information, byline; updates stock movement.)

By Ernest Scheyder

NEW YORK, Oct 21 (Reuters) - Air Products and Chemicals Inc (APD.N) posted a 6.8 percent drop in quarterly net profit on Wednesday as sales fell across its businesses, but the results narrowly beat analysts' expectations.

The company supplies industrial gases for the construction and energy companies, among others, and the weak results indicate that demand for those sector's products continues to lag in the weak economy.

Air Products did slash costs earlier this year -- a popular corporate move in order to boost profits -- and now says that step will help it recover more quickly.

"Sequentially, we are seeing volume improvement in all our businesses, and our actions to move to a sustainable, low-cost structure have positioned us to capitalize on growth as our markets recover," Chief Executive Officer John McGlade said in a statement.

Ticonderoga Securities analyst Chris Shaw said the results reflected a "strong quarter," and the improving demand suggested an economic recovery was "genuinely taking hold."

For the quarter, the company posted net income of $243.9 million, or $1.13 per share, compared with $261.6 million, or $1.21 per share, a year earlier.

The results includes a loss of 1 cent per share from discontinued operations.

Analysts, who generally exclude discontinued operations and one-time items from their estimates, had expected profit of $1.12 a share on average, according to Thomson Reuters I/B/E/S estimates.

Revenue fell 22 percent to $2.13 billion, but exceeded the $2.09 billion analysts had expected.

For fiscal 2010, the company expects earnings of $4.65 to $4.90 per share.

Shares of the Allentown, Pennsylvania-based company were down 0.4 percent to $82.92 in early trading.

Air Products peer Praxair Inc (PX.N) is set to post fiscal third-quarter earnings on Oct. 28. (Reporting by Ernest Scheyder, editing by Gerald E. McCormick and Lisa Von Ahn)