Core Viewpoint - The industrial sector is positioned as a strong investment opportunity in 2026, particularly as tech stocks face volatility. Companies like Air Products, Ecolab, and Linde are highlighted for their robust performance and growth potential amidst steady industrial demand [1]. Company Summaries Air Products and Chemicals (APD) - Air Products reported Q1 revenue of $3.10 billion and adjusted EPS of $3.16, exceeding estimates of $3.04, with a year-over-year earnings growth of 10% [1]. - The company secured contracts with NASA exceeding $140 million and is advancing low-emission ammonia projects, showcasing its leadership in hydrogen and carbon capture technology [1]. - Management's guidance for fiscal 2026 indicates adjusted EPS of $12.85-$13.15, reflecting confidence in project execution [1]. Ecolab (ECL) - Ecolab achieved record fiscal 2025 sales of $16 billion, with a 15% growth in Q4 adjusted EPS [1]. - The company serves critical functions in water treatment and hygiene across 170+ countries, contributing to 3% organic sales growth and a 140 basis points increase in operating margin to 18.5% in Q4 [1]. - Ecolab's digital transformation initiatives are expected to yield $325 million in annualized savings by 2027, with high-growth segments like Ecolab Digital growing 24% [1]. Linde (LIN) - Linde generated fiscal 2025 sales of $34.0 billion and an adjusted operating profit of $10.1 billion, achieving a 29.5% operating margin [1]. - The company maintains a $10.0 billion project backlog, indicating strong future growth visibility [1]. - Linde returned $7.4 billion to shareholders in 2025 and is investing in hydrogen infrastructure and carbon capture solutions, positioning itself favorably for energy transition trends [1]. Industrial Sector Performance Summary - The industrial sector has shown steady growth, with companies like Air Products, Ecolab, and Linde demonstrating operational excellence and consistent cash generation from essential products [2]. - These companies have pricing power and return capital consistently, making them attractive investments in a market characterized by non-discretionary industrial demand [2].

Financial Data and Key Metrics Changes - Sales for the fourth quarter reached $8.8 billion, a 6% increase year-over-year and a 2% sequential increase [10] - Operating profit was $2.6 billion, up 4% from the prior year, resulting in a 29.5% margin [10] - EPS increased by 6% to $4.20, driven by a lower share count [11] - Operating cash flow exceeded $3 billion in the fourth quarter, supported by stronger collections and inventory management [12] Business Line Data and Key Metrics Changes - Underlying sales increased by 3%, driven by 2% pricing and 1% volume growth [10] - Volume growth was primarily attributed to project startups in the Americas and APAC, while base volume growth in the Americas was offset by industrial softness in EMEA [10] - CAPEX grew by 17%, reflecting spending for the record project backlog [11] Market Data and Key Metrics Changes - The economic environment in 2025 showed a divergence, with strong investment in AI and digital infrastructure contrasting with weakness in traditional industrial markets [3] - EMEA continues to experience broad-based weakness, with pricing growth slowing to +1% in Q4 [18] - The Americas market showed resilience, with sales up across almost every end market, particularly in electronics and commercial space [24] Company Strategy and Development Direction - The company aims to balance stakeholder needs while delivering long-term value creation through safety, environmental stewardship, financial performance, and future growth [4] - A record project backlog of $10 billion positions the company for future growth, with significant investments in clean energy projects [7] - The company is focused on restructuring actions to better position itself for 2026, expecting benefits primarily in the second half of the year [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the recovery in certain regions, particularly in the U.S. manufacturing sector [72] - The company anticipates continued investment in the space sector and expects to capture a significant share of this growing market [42] - Management remains vigilant about the economic landscape, emphasizing the unpredictability of macroeconomic conditions [15] Other Important Information - The company achieved a 24.2% return on capital, leading the industry and validating its disciplined capital allocation policy [6] - The company has made substantial progress in reducing its environmental footprint, with a 23% increase in low-carbon power sourcing [5] Q&A Session Summary Question: Are there signs of progress in Europe? - Management noted continued broad-based weakness in Europe, with some optimism in Northern Europe and Germany, but no substantial recovery catalysts are evident [18] Question: What are the growth expectations across different regions? - Management expressed a slightly more positive outlook for industrial activity, particularly in the U.S. and India, while cautioning about the ongoing challenges in Europe and ASEAN [24][64] Question: What is the expected trajectory of gas backlog sales? - Management expects to return to a backlog closer to $7 billion, with significant project startups anticipated in 2026 [34] Question: How will restructuring impact margins? - Management indicated that restructuring actions typically yield a payback period of about two years, with expectations of margin expansion in 2026 [38] Question: What is the impact of helium on financial performance? - Helium is expected to remain a low single-digit business, with a headwind of 1%-2% on EPS for 2025, and no significant changes anticipated for 2026 [74][76]

Investment Opportunity - The world requires an investment of $7 trillion in infrastructure to support AI adoption over the next decade, covering AI factories, compute infrastructure, and power transmission [1] Company Overview - Brookfield Infrastructure is a leading global infrastructure company with diversified operations in utilities, energy midstream, transportation, and data infrastructure, generating steadily growing cash flow [5] Financial Performance - In 2025, Brookfield's funds from operations (FFO) grew by 6%, driven by inflation-related rate increases, volume growth, over $1.5 billion in new capital projects, and more than $1.1 billion in acquisitions [5] Data Center Capacity - Brookfield operates approximately 1.2 gigawatts (GW) of data center capacity globally, with an additional 1.1 GW of contracted capacity in its backlog and land capable of supporting 1.3 GW more [7] Growth in Data Infrastructure - The data infrastructure segment saw a more than 50% increase in FFO last year, aided by the commissioning of 220 megawatts (MW) of new data center capacity [6] Strategic Investments - Brookfield is investing in innovative power solutions for data centers, including a $5 billion framework agreement with Bloom Energy, which has led to the installation of 55 MW of power and secured contracts for an additional 230 MW by mid-2027 [8]

Core Viewpoint - Air Products and Chemicals, Inc. reported strong financial results for its fiscal first quarter, demonstrating resilience in challenging market conditions and maintaining a positive outlook for the fiscal year 2026 [2][3][4]. Financial Performance - The company achieved an EPS of $3.16, exceeding the estimated $3.04, and revenue reached approximately $3.1 billion, surpassing the estimated $3.05 billion [2][6]. - The GAAP EPS was reported at $3.04, marking a 10% increase year-over-year, while GAAP operating income rose to $735 million, a 14% increase from the previous year [3]. - Adjusted EPS of $3.16 and adjusted operating income of $757 million reflect a 12% rise, indicating robust financial health [3]. Guidance and Projections - Air Products is maintaining its full-year adjusted EPS guidance for fiscal 2026, projected to be between $12.85 and $13.15 [4][6]. - For the second quarter, the adjusted EPS is expected to range from $2.95 to $3.10 [4]. Strategic Initiatives - The company is engaged in advanced negotiations with Yara International for low-emission ammonia projects and has secured a $140 million contract with NASA for liquid hydrogen supply [5]. - Air Products increased its quarterly dividend to $1.81 per share, marking the 44th consecutive year of dividend increases [5]. - The company has a strong liquidity position, with a current ratio of 1.38, supporting its strategic initiatives for future growth [5].

Market Overview - US equities showed strong momentum in 2025, achieving double-digit gains for the second consecutive year, with a rapid recovery from a bear market dip in April [1] - Market leadership has narrowed, with Mega-cap stocks and AI-driven companies dominating [1] Mar Vista U.S. Quality Strategy Performance - The Mar Vista U.S. Quality strategy reported a net-of-fees gain of +0.20% in Q4 2025, compared to the Russell 1000® Index's +2.41% and the S&P 500® Index's +2.65% [1] - Favorable stock selection in communication services, consumer discretionary, and financials contributed positively, while information technology, materials, and healthcare detracted from performance [1] Economic Outlook - For 2026, markets are expected to balance strong fundamentals with increasing economic uncertainties [1] Company Spotlight: Linde plc - Linde plc (NASDAQ:LIN) is highlighted as a leading industrial gas company with a market capitalization of $207.68 billion [2] - As of January 13, 2026, Linde's stock closed at $442.90 per share, with a one-month return of 4.87% and a 52-week gain of 3.49% [2] Linde plc Performance Challenges - Despite being a high-quality leader, Linde's shares declined nearly 10% in Q4 2025 due to a persistent industrial gas volume recession and softer guidance [3] - The company faces negative base volumes in core segments, attributed to economic stagnation in Europe and suppressed demand in China, with price increases insufficient to offset 1-3% volume declines in these regions [3]

Core Viewpoint - Air Products and Chemicals, Inc. (NYSE:APD) is facing mixed analyst sentiments, with recent downgrades reflecting ongoing sector challenges, while the company is also positioning itself as a leader in energy and environmental solutions, particularly in hydrogen projects [2][4]. Analyst Ratings and Price Targets - Wells Fargo downgraded Air Products to Equal Weight from Overweight and reduced the price target to $250 from $330, citing "trough-like conditions" in the chemical sector expected to persist into the first half of 2026 [2]. - Mizuho lowered its price target on Air Products to $290 from $300 but maintained an Outperform rating, indicating a cautious outlook for the chemicals sector due to weak market conditions [3]. Sector Challenges - Analysts highlighted several pressures on the chemical sector, including a muted recovery in China and slow housing markets in the US and Europe, which are contributing to a challenging environment for chemical stocks [2]. - The March quarter is anticipated to start weak, similar to the December quarter, as rising exports from China continue to impact basic chemical markets [3]. Strategic Positioning and Projects - Air Products is focusing on solutions related to energy and environmental challenges, with significant investments in gasification, carbon capture, and clean hydrogen technologies [4]. - The NEOM Green Hydrogen Project in Saudi Arabia is about 80% complete and is expected to begin production by 2027. Additionally, the company is advancing an $8 billion blue hydrogen project in Louisiana and a $3.3 billion blue hydrogen project in Canada, along with a smaller $360 million green hydrogen project in Arizona expected to start in 2026 [5]. Industry Leadership - Air Products remains a global leader in industrial gases and liquefied natural gas processing technology and equipment, indicating its strong market position despite current sector headwinds [6].

Core Insights - Air Products is a global industrial gases company with an 85-year history, operating in approximately 50 countries and supplying essential industrial gases to various industries [1] - The company is the leading global supplier of hydrogen and is involved in developing and operating large clean hydrogen projects, supporting the transition to low and zero carbon energy [1] Company Leadership - Eduardo Menezes, the CEO of Air Products, joined the company in February 2025 and has over 30 years of industry experience, focusing on the core industrial gas business and optimizing the project portfolio [2] - Melissa Schaeffer, the CFO, has been with Air Products since 2016 and leads the global finance organization, contributing to the strategic roadmap aimed at margin expansion and earnings growth [2] Strategic Focus - Air Products is targeting industry-leading adjusted operating margins and aims for further margin expansion and earnings growth [2]

Fiscal Fourth Quarter 2025 Earnings Results Teleconference November 6, 2025 Forward-Looking Statements This presentation contains "forward-looking statements" within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about earnings and capital expenditure guidance, business outlook and investment opportunities. These forward-looking statements are based on management's expectations and assumptions as of the date of this presentation and are not guarantee ...

Core Viewpoint - Air Products forecasts 2026 adjusted profit exceeding Wall Street estimates after surpassing quarterly profit expectations due to strong sales in Europe and Asia [1] Group 1: Financial Performance - The company reported strong quarterly profits driven by robust sales in European and Asian markets [1] - Adjusted profit for 2026 is projected to be above Wall Street estimates, indicating positive growth expectations [1] Group 2: Market Dynamics - The strong sales performance in Europe and Asia highlights the company's effective market strategies and demand for industrial gases in these regions [1]

Core Insights - Linde reported Q3 2025 adjusted EPS of $4.21, reflecting a 7% year-over-year increase, with sales reaching $8.62 billion, up 3% [1][5] - The company maintained industry-leading margins and narrowed its full-year adjusted EPS guidance to $16.35–$16.45, indicating a 5%–6% growth [1][5] Financial Performance - Net income was $1.93 billion (GAAP), with diluted EPS of $4.09, a 27% increase [5] - Adjusted net income was $1.99 billion, with adjusted EPS at $4.21, marking a 7% rise [5] - Sales increased by 3% to $8.62 billion, driven by a 2% contribution from pricing and a 1% contribution from M&A [5] - Adjusted operating profit reached $2.56 billion, up 3%, yielding a 29.7% adjusted margin, which is a 10 basis points increase year-over-year [5] Cash Flow and Returns - Operating cash flow rose to $2.95 billion, while free cash flow was $1.67 billion after $1.28 billion of capital expenditures [5] - Linde returned $1.69 billion to shareholders through dividends and buybacks during the quarter [5] Guidance and Outlook - Q4 adjusted EPS is expected to be between $4.10 and $4.20, reflecting a 3%–6% year-over-year increase [5] - Full-year 2025 adjusted EPS guidance is set at $16.35–$16.45, with a flat foreign exchange impact [5] - Full-year capital expenditures are projected to remain between $5.0 billion and $5.5 billion, supporting growth and a $7.1 billion project backlog [5] Segment Performance - **Americas**: Sales of $3.85 billion, a 6% increase; underlying growth of 4% driven by a 3% price increase and 1% volume growth in electronics and manufacturing [5] - **EMEA**: Sales of $2.18 billion, up 3%; underlying performance down 1% due to a 2% price increase but a 3% decline in volumes [5] - **APAC**: Sales of $1.74 billion, a 1% increase; underlying performance down 1% due to stable volumes and lower helium pricing [5] - **Linde Engineering**: Sales decreased by 15% to $519 million, with an operating profit of $101 million and a margin of 19.5% [5]