Airgas Inc (ARG) Tops Q2 EPS by 1c, Lowers FY EPS Guidance

Airgas Inc (NYSE: ARG) reported Q2 EPS of $1.30, $0.01 better than the analyst estimate of $1.29. Revenue for the quarter came in at $1.36 billion versus the consensus estimate of $1.33 billion.

Airgas Inc sees FY2014 EPS of $5.00-$5.10, versus prior guidance of $5-$5.2 and the consensus of $5.09.

Airgas Inc sees Q3 2014 EPS of $1.20-$1.25, versus the consensus of $1.28.

Guidance

“We’re squarely focused on executing on the fundamentals of our business,” said Airgas Executive Chairman Peter McCausland. “We continue to develop our sales channels through Total Access and our robust new e-Business platform, as well as strengthening our sales organization through enhancements like the new District Manager role, training, and sales force effectiveness initiatives. We’re leveraging SAP to improve the productivity of our business, and expense control is a high priority. As imbalances in supply and demand for certain products, particularly argon, have pressured our product costs and distribution expenses, we are working hard to try to recover those costs through our pricing actions.”

“Ninety-eight percent of our business is based right here in the world’s largest economy, and we believe the fundamentals for long-term growth in the U.S. economy, particularly in the manufacturing, construction and energy industries, will be favorable for years to come,” McCausland added. “Overall, we are seeing modestly strengthening business conditions and expect near-term continued improvement, despite softness in some sectors. Our guidance continues to assume acceleration in sales growth rates during the second half of the year, with the reduction in the high end of our range primarily reflecting mix pressure from outperformance in hardgoods, cost pressures related to supply disruptions, and a lower than previously expected year-over-year contribution from refrigerants.”

For the third quarter of fiscal year 2015, the Company expects earnings per diluted share in the range of $1.20 to $1.25, representing an increase of 9% to 14% over prior year earnings per diluted share of $1.10 and an increase of 2% to 6% over prior year adjusted earnings per diluted share* of $1.18. Third quarter guidance assumes a year-over-year organic sales growth rate in the mid single digits. For the full fiscal year 2015, the Company expects earnings per diluted share in the range of $5.00 to $5.10, representing an increase of 7% to 9% over prior year earnings per diluted share of $4.68 and an increase of 6% to 8% over prior year adjusted earnings per diluted share* of $4.72. Full year guidance includes a negative $0.09 to $0.11 per diluted share year-over-year impact from variable compensation reset following a below-budget year in fiscal 2014.

The Company’s previous fiscal 2015 guidance range for earnings per diluted share was $5.00 to $5.20, an increase of 6% to 10% over fiscal 2014 adjusted earnings per diluted share*.

For earnings history and earnings-related data on Airgas Inc (ARG) click here.

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