May 5, 2011 / 12:45 PM / 7 years ago

UPDATE 4-Airgas beats Street on strong manufacturing sales

* Q1 adj EPS 88 cents vs Wall Street forecast 85 cents

* Revenue up 12 percent to $1.1 billion

* Forecasts fiscal Q1 EPS in range mostly below Street

* CEO says has not talked with Air Products chief

* Shares slip slightly in afternoon trading (Adds analyst; updates stock)

By Ernest Scheyder

NEW YORK, May 5 (Reuters) - Airgas Inc ARG.N posted a higher-than-expected quarterly profit as manufacturers bought more of its oxygen and other industrial gases, partly lending credence to the company’s recent fight to stay independent.

Airgas supplies canisters of oxygen, argon and other gases used in construction, healthcare and dozens of other industries.

It successfully fended off a hostile $5.9 billion takeover bid from rival Air Products and Chemicals (APD.N) earlier this year, in part by insisting that its shareholders would see a greater return if the deal did not go through. [ID:nN15128419]

“As we stated during the takeover fight, we were positioned to emerge from the recession stronger than ever,” Airgas Chief Executive Peter McCausland told Reuters on Thursday. “And that’s essentially what happened.”

McCausland said he has not spoken with Air Products Chief Executive John McGlade since the hostile bid ended and has no plans to meet with him.

(For a graphic on Airgas, click on:

Air Products supplies Airgas with much of the gas it packages and sells. McCausland said he expects that relationship to continue and possibly grow.

For the fiscal fourth quarter, Airgas posted net income of $62.6 million, or 74 cents per share, compared with $40.1 million, or 47 cents per share, in the year-earlier period.

    Excluding costs to defend against the Air Products takeover bid, Airgas earned 88 cents per share. Analysts had expected 85 cents a share, according to Thomson Reuters I/B/E/S.

    Revenue rose 12 percent to $1.1 billion. Analysts had expected $1.07 billion.

    “The results further suggest that the domestic manufacturing economy is stronger than what the media suggests,” Morningstar analyst Basili Alukos said.

    For the first quarter, Airgas expects adjusted earnings of 92 to 97 cents per share. Wall Street expects 96 cents per share.

    “We tried to give a range that we thought was reasonable, and I think our range brackets where the Street is,” McCausland said. “I wouldn’t characterize (the forecast) as being below the Street.”

    Airgas also announced a $300 million stock repurchase program on Thursday.

    Air Products and Chemicals ended its year-long battle to buy Airgas in February after a judge upheld Airgas’s use of a “poison pill” defense against the $5.9 billion takeover offer. [ID:nN15128419]

    Airgas shares slid 3 cents to $67.64 in afternoon trading. The stock has traded between $59.26 and $71.28 in the past 52 weeks. (Reporting by Ernest Scheyder, editing by Dave Zimmerman and Gerald E. McCormick)

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