* Fiscal Q1 adj EPS 99 cents vs. Street forecast 96 cents
* Revenue $1.16 billion vs. $1.15 billion expectation
* Q2 guidance ahead of estimates; full-year outlook raised
* CEO calls on Congress to reform U.S. tax code
* Shares up 0.9 percent in afternoon trading
(Adds analyst; updates stock)
By Roy Strom and Ernest Scheyder
NEW YORK, July 28 Industrial gas supplier
Airgas Inc ARG.N posted a higher-than-expected quarterly
profit and raised its 2011 forecast on Thursday, saying it is
seeing improvement in U.S. manufacturing.
Airgas supplies canisters of oxygen, argon and other gases
used in construction, healthcare and dozens of other
Many of Airgas' customers are expanding in the United
States, where nearly all of the company's operations are
located, Airgas Chief Executive and founder Peter McCausland
"Our manufacturing customers are hiring, they're building
new plants, they're expanding existing plants," he said. "I
wouldn't call it gangbusters, but we haven't seen this in years
That is helping results, BB&T Capital Markets analyst
Holden Lewis said.
"North American industrial activity remains reasonably
healthy," Lewis said. Airgas is "without a doubt continuing to
see the benefits and advantages of that sort of environment."
McCausland said U.S. lawmakers debating the country's debt
limit and deficit should address Medicare, Social Security and
"What's going on in Washington concerns me more than
anything going on in our business," McCausland said. "We need
courageous people in Washington and my biggest fear is they're
The U.S. should start taxing offshore profit from American
companies, he said.
With most of its operations in the United States, Airgas
pays the full 39 percent corporate tax rate.
McCausland also said he favors a plan from U.S. House of
Representatives Speaker John Boehner, which would extend the
U.S. Treasury's borrowing authority by a few months, something
President Barack Obama has said he does not agree with.
Extending the deadline temporarily "means that we'll have
to deal with it in a year, but that's not a bad thing,"
McCausland said. "I think it's a good idea that it's on the
table as we move toward the elections next year."
Airgas reported earnings per share of 99 cents, excluding
items. Analysts on average had expected 96 cents, according to
Thomson Reuters I/B/E/S.
Revenue came in at $1.16 billion, slightly topping
analysts' expectations of $1.15 billion.
Net income was $74.85 million, compared with $64.80 million
a year ago.
The low end of the company's second-quarter guidance came
in above the 98 cents analysts expect.
Airgas said second-quarter unadjusted earnings per share
will be between 99 cents and $1.03, a 19 percent to 24 percent
rise from last year.
Airgas raised its full-year profit forecast to $3.90 to
$4.05 a share, excluding items, from $3.75 to $3.90. It cited
favorable business trends.
The company successfully fended off a hostile $5.9 billion
takeover bid from rival Air Products and Chemicals Inc (APD.N)
earlier this year, in part by insisting its shareholders would
see a greater return if the deal did not go through.
The shares of Pennsylvania-based Airgas were up 0.9 percent
at $69.13 in afternoon trading. The stock has traded between
$60.33 and $71.25 in the past 52 weeks.
(Reporting by Roy Strom and Ernest Scheyder; editing by Lisa
Von Ahn, Dave Zimmerman, Andre Grenon and Gunna Dickson)