UPDATE 3-Airgas sees strong volumes ahead on high demand
* Q2 adj EPS $1.03 vs est $1.02
* Q2 rev up 12 pct at $1.19 bln, beats
* Forecasts Q3 adj EPS of $0.95-$0.98
* Ups FY adj EPS view to $3.97-$4.07
* Shares up 1.5 pct
Oct 27 (Reuters) - Airgas Inc beat Wall Street estimates with a 17 percent rise in quarterly profit, as manufacturing and energy customers kept demand high, prompting the industrial gas supplier to raise its full-year adjusted earnings outlook.
Manufacturing, medical, petrochemical and utilities sectors are the strongest customer bases for Airgas, which supplies canisters of oxygen, argon and other gases used in construction, healthcare and many other industries.
Airgas shares were up 1.5 percent at $70.34 at midday on Thursday on the New York Stock Exchange.
"On the strength of our second quarter results and outlook for sustained volumes in the coming quarter, we have raised our earnings guidance for fiscal 2012," Airgas Chief Executive Peter McCausland, who founded the company in 1982, said on a conference call.
"October sales are trending well, consistent with the favorable daily sales run rates we saw in September."
He said Airgas continues to see strength in the manufacturing-intensive regions of the United States and in its petrochemical and energy customers.
Rival Praxair Inc earlier this week reported a slightly higher-than-expected quarterly profit, while Air Products' earnings came in line with Wall Street's expectations.
McCausland said Airgas will be initiating "a pricing action" in its gas and hardgoods segments to offset costs. The hardgoods business comprises welding equipment, safety products, construction supplies, and maintenance, repair and operating supplies.
"Later in the (second) quarter, we found ourselves slightly behind the curve on rising hardgoods product costs ... In addition, we had to overcome supply-chain disruptions in a few gases, including helium, acetylene, and argon," he said.
Airgas, which has made about 400 acquisitions so far, said its appetite for acquisitions remains strong and is targeting $150 million in acquired annual sales this fiscal year.
Acquisitions contributed sales growth of 2 percent in the second quarter, the company said.
"While our acquisition pipeline is far more active than it was last year, some potential sellers are delaying decisions in the wake of market volatility," McCausland said.
Airgas' profit for the fiscal second quarter ended Sept. 30 rose to $77.7 million, or $1.01 per share, from $66.6 million, or 78 cents per share in the year-ago period.
Excluding items, it earned $1.03 per share. Analysts on average expected earnings of $1.02 per share, according to Thomson Reuters I/B/E/S. This is the seventh quarter in a row that profit has beaten analysts' expectations.
Revenue rose 12 percent to $1.19 billion, ahead of expectations of $1.17 billion. Total same-store sales grew 10 percent in the quarter.
Pennsylvania-based Airgas forecast full-year adjusted per-share earnings of $3.97 to $4.07, compared with $3.90 to $4.05 earlier. Wall Street projection is for a profit of $3.99.
It projected third-quarter adjusted earnings of 95 cents per share to 98 cents per share. Analysts were expecting 97 cents per share.
Airgas stock has gained about 10 percent in value this year, outpacing the 2 percent rise in the S&P Industrial Gases Sub-Industry index .
- Israel rejects ceasefire plan, source says, as death toll nears 850 |
- First Ebola victim in Sierra Leone capital on the run
- Obama tells Central American leaders most children will go home
- EU edges to economic sanctions on Russia but narrows scope |
- Bad weather seen as probable cause of Air Algerie crash