Air Products and Chemicals(US:APD)2026-01-30 12:40Financial Performance - Fiscal 2026 Q1 GAAP operating income was $735 million, a 14% increase from the prior year, with a GAAP operating margin of 23.7%[1] - Adjusted operating income for Q1 was $757 million, up 12%, with an adjusted operating margin of 24.4%[1] - Q1 sales reached $3.1 billion, reflecting a 6% increase year-over-year, driven by a 3% higher energy cost pass-through and a 1% increase in pricing[1] - GAAP EPS for Q1 was $3.04, a 10% increase, while adjusted EPS was $3.16, also up 10% and exceeding guidance[3] - Operating income for the total segments increased to $756.5 million, a 12.3% rise compared to $673.5 million in the previous year[18] - Net income attributable to Air Products for the three months ended December 31, 2025, was $678.2 million, an increase of 9.8% from $617.4 million in the same period of 2024[15] - Total sales for the three months ended December 31, 2025, reached $3,102.5 million, up 5.8% from $2,931.5 million in the prior year[17] Guidance and Projections - The company maintains full-year fiscal 2026 adjusted EPS guidance of $12.85 to $13.15 and Q2 adjusted EPS guidance of $2.95 to $3.10[3] - Adjusted EPS for FY2025 is projected at $12.03, with an outlook for FY2026 adjusted EPS ranging from $12.85 to $13.15, reflecting a 7% to 9% increase[39] - The adjusted EPS guidance for FY2026 indicates a potential increase of $0.26 to $0.41 per share compared to FY2025[39] Capital Expenditures - Capital expenditures for fiscal 2026 are expected to be approximately $4.0 billion[3] - Capital expenditures for Q1 FY2026 were reported at $910.7 million, a decrease from $1,209.8 million in Q1 FY2025[33] - The company expects capital expenditures of approximately $4.0 billion for FY2026[35] Segment Performance - Americas segment sales were $1.3 billion, up 4%, with operating income of $404 million, a 4% increase[7] - Europe segment sales increased 12% to $782 million, with operating income rising 20% to $224 million[7] Cash Flow and Assets - Cash provided by operating activities was $900.7 million, compared to $811.7 million for the same period last year, reflecting a 10.9% increase[15] - Total current assets decreased to $5,103.2 million from $5,825.8 million, a decline of 12.4%[13] - Cash and cash items at the end of the period were $1,026.4 million, down from $1,845.5 million, a decrease of 44.4%[15] Liabilities and Debt - Total liabilities decreased to $23,403.6 million from $23,709.7 million, a reduction of 1.3%[13] - Long-term debt increased to $17,114.6 million from $16,769.9 million, reflecting a rise of 2.1%[13] Other Financial Items - The company recorded charges for business and asset actions totaling $28.3 million, impacting operating income by $22.0 million[25] - Non-service related pension items resulted in net non-operating costs of $3.4 million ($2.5 million after tax, or $0.01 per share) in Q1 FY2026, down from $10.5 million ($7.9 million after tax, or $0.04 per share) in Q1 FY2025[30] - Shareholder activism-related costs in Q1 FY2025 amounted to $29.9 million ($21.9 million after tax, or $0.10 per share) due to a proxy contest[27] - An unrealized gain of $38.8 million ($10.3 million attributable to Air Products after tax, or $0.05 per share) was recorded in Q1 FY2025 from the de-designation of cash flow hedges[28] - The unrealized gain on swaps that remained de-designated during Q1 FY2026 was not material, with all swaps re-designated as cash flow hedges as of January 1, 2026[29] Contracts and Negotiations - The company announced advanced negotiations with Yara International for low emission ammonia projects in the U.S. and Saudi Arabia[3] - Air Products secured supply contracts from NASA totaling over $140 million for liquid hydrogen[3]