Air Products (NYSE: APD) reported Q2 EPS of $2.04, $0.02 worse than the analyst estimate of $2.06. Revenue for the quarter came in at $2.216 billion versus the consensus estimate of $2.15 billion.

Q2 FY20 (comparisons versus prior year):

• GAAP EPS of $2.21, including an estimated $0.06 to $0.08 negative impact from COVID-19, up 16 percent; GAAP net income, including discontinued operations, of $490 million, up 13 percent; and GAAP net income margin of 22.1 percent, up 230 basis points
• Adjusted EPS* of $2.04, including an estimated $0.06 to $0.08 negative impact from COVID-19, up six percent; adjusted EBITDA margin* of 40.3 percent, up 260 basis points

Q2 FY20 Highlights

• Safely maintained plant operations and business continuity, provided essential products to customers, mobilized to meet urgent needs for medical oxygen, and continued to pursue and win new on-site opportunities during the COVID-19 pandemic
• Stable onsite business; Asia merchant volumes were impacted by COVID-19 but have since recovered; limited Americas and EMEA merchant volume impact during Q2
• Secure financial position with robust cash flow, $2.2 billion cash on hand and modest net debt* of $1.1 billion as of March 31, 2020
• Announced and closed on purchase of five operating hydrogen plants in the U.S. and began long-term hydrogen supply to PBF Energy
• Signed agreement to provide proprietary liquefied natural gas (LNG) technology, equipment and related process license and advisory services to the first onshore LNG project in the Republic of Mozambique

"The true character of an individual, or a company, is revealed during times of crisis. The world is certainly going through a crisis - something none of us has experienced in our lifetime," Ghasemi said. "I am very proud of our people's tireless efforts to maintain business continuity, keep our plants running safely, reliably serve our customers, and care for our communities during this especially challenging time.

"Their hard work enabled us to deliver the fiscal second quarter results that we are reporting today. Meanwhile, Air Products remains in a secure financial position with a strong balance sheet and resilient business model, particularly our onsite business, which represents more than half of our sales and continues to drive our growth. Our strategy to create shareholder value has not changed – we continue to invest in high return project opportunities and are committed to increasing the dividend as we move forward."

Outlook

Ghasemi said, "It is encouraging to see some improvement in the number of COVID cases and a flattening of the curve in certain areas around the world; however, significant economic uncertainty remains. Despite this, our strong financial position and robust business model will allow us to continue to execute our strategy to create long-term shareholder value through capital deployment and successful execution of the projects in our backlog. Our dividend growth remains a top priority. Most importantly, we will not let up our efforts to protect our people's health and safety and take care of their welfare – they are what make the continued success of Air Products possible."

Air Products expects declines in Americas and EMEA merchant volumes to continue and be more significant in its fiscal third quarter and potentially longer depending on the duration and impacts of the COVID-19 pandemic.

Given the significant uncertainty that remains regarding the duration of the crisis, the pace of recovery and the negative impact on the global economy from the rapidly evolving COVID-19 pandemic, Air Products is not providing Q3 FY20 EPS guidance. In addition, in light of current conditions, Air Products also believes it is prudent to withdraw its FY20 EPS and capital expenditure guidance; the Company advises its investors that such guidance should no longer be relied upon. Air Products is not providing new FY20 guidance at this time.

For earnings history and earnings-related data on Air Products (APD) click here.