Air Products and Chemicals 2025 Q2 Earnings Misses Targets with Net Loss of 399.1%

Air Products and Chemicals (APD) reported its fiscal 2025 Q2 earnings on May 01st, 2025. The company faced significant challenges, missing expectations with a net loss of $1.74 billion, driven by strategic business and asset actions. Adjusted EPS guidance for fiscal year 2025 was lowered to $11.85-$12.15, reflecting a cautious outlook. The company also revised its third-quarter adjusted EPS guidance to $2.90-$3.00, indicating a potential recovery in the coming months. Despite these setbacks, Air Products remains committed to strategic investments and operational improvements.

Revenue

Air Products and Chemicals experienced a 0.5% decline in total revenue for 2025 Q2, reaching $2.92 billion compared to $2.93 billion in 2024 Q2. The on-site segment generated $1.55 billion, while the merchant segment contributed $1.27 billion, and the sale of equipment added $94.70 million to the revenue figures.

Earnings/Net Income

Air Products and Chemicals reported a loss of $7.77 per share in 2025 Q2, a sharp decline from the $2.57 per share profit in 2024 Q2. The net income fell significantly, marking a 399.1% negative change. This downturn reflects strategic challenges and adjustments faced by the company.

Price Action

The stock price of Air Products and Chemicals has climbed 5.24% during the latest trading day, has edged up 1.23% during the most recent full trading week, and has dropped 7.72% month-to-date.

Post-Earnings Price Action Review

Historically, Air Products and Chemicals' earnings report metrics, such as revenue, net income, and EPS, have resulted in favorable short-to-medium-term gains for investors. The backtest results indicate 3-Day, 10-Day, and 30-Day win rates of 50%, 50%, and 55%, respectively, highlighting a higher likelihood of positive stock performance following earnings reports. Average returns post-earnings show a modest yet positive trend, with 3-Day returns at 0.72%, 10-Day returns at 0.96%, and 30-Day returns at 1.76%. The maximum return observed was 4.08%, occurring on day 51 after the earnings release. These findings suggest that while immediate reactions are subtle, holding the stock for longer periods post-earnings can yield significant gains. Investors may consider this historical trend when strategizing their investments in APD stock after earnings releases.

CEO Commentary

Eduardo Menezes, CEO of Air Products and Chemicals, expressed confidence in the company's solid core industrial gas business, citing a $12 billion sales figure with a 24% operating margin. He acknowledged challenges due to past strategic shifts, particularly the pivot away from core business areas, resulting in increased financial leverage and project delays. Menezes emphasized a return to fundamentals, focusing on disciplined capital investments of approximately $1.5 billion annually in core projects with contracted take-or-pay agreements. He conveyed an optimistic tone about improving margins and profitability, stating, "Air Products can grow strongly and profitably in traditional industrial gases."

Guidance

For fiscal year 2025, Air Products expects adjusted earnings per share to range from $11.85 to $12.15, with anticipated base business growth of 2% to 5%. The company aims for capital expenditures to be approximately $5 billion, alongside projected adjusted EPS of around $2.90 to $3 for the third quarter. The outlook anticipates high single-digit adjusted EPS growth from 2026 to 2029, with expectations for neutral aggregated net cash flow during this period.

Additional News

In recent corporate developments, Air Products appointed Eduardo F. Menezes as Chief Executive Officer and member of the Board of Directors, with Wayne T. Smith and Dennis H. Reilley named Chairman and Vice Chairman, respectively. The company announced an increase in its quarterly dividend to $1.79 per share, marking the 43rd consecutive year of dividend increases. Additionally, Air Products decided to exit three U.S. projects: the World Energy Sustainable Aviation Fuel expansion in California, the green liquid hydrogen project in New York, and the carbon monoxide project in Texas, resulting in charges of approximately $2.9 billion. These strategic shifts reflect the company's efforts to streamline operations and focus on core projects with the potential for long-term value creation.