(Adds analysts comments, rewrites throughout)
Oct 25 (Reuters) - Quarterly sales at Air Liquide’s biggest division, gas and services, grew at the fastest pace in 18 months, mainly driven by China, sending the company’s shares to near two-year highs on Wednesday.
Third-quarter sales at the division rose four percent, on a comparable basis, to 4.79 billion euros ($5.63 billion), well ahead of the 2.7 percent growth reported in the second quarter.
“We think this is the strongest quarterly performance (organic growth) we’ve seen from AL for some time in G&S,” Morgan Stanley analysts said in a note.
The last time the division, which made the biggest contribution to group revenue in 2016, reported more than four percent growth was in the first quarter of last year.
Analysts at Liberum and Morgan Stanley applauded the fact that synergies from the company’s acquisition of Airgas were running ahead of schedule.
Air Liquide said by the end of 2017 it would achieve synergies of $195 million, 11 percent above previous estimates.
The $13.4 billion acquisition in 2016 aimed to propel Air Liquide past rivals including Praxair in the U.S. market.
Liberum analyst Adam Collins said the synergies gave scope for an “impressive mid term earnings beat”.
Liberum has a “buy” rating on Air Liquide shares, and Morgan Stanley an “overweight” recommendation.
At 1150 GMT, the shares were up 3 percent at 107.7 euros.
Air Liquide confirmed it expected to report net profit growth in 2017.
$1 = 0.8493 euros Reporting by Manon Jacob and Alan Charlish; Editing by Jason Neely and Mark Potter