Air Products and Chemicals 2025 Q4 Earnings Beats Estimates Despite Revenue Decline

Air Products and Chemicals (APD) reported Q4 2025 results that exceeded Wall Street’s EPS expectations, with adjusted earnings of $3.39 per share, outperforming the $3.38 consensus. However, revenue fell 0.6% to $3.17 billion, missing the $3.22 billion estimate. The company also raised full-year 2026 adjusted EPS guidance to $12.85–$13.15, slightly above the $12.88 consensus, and reaffirmed Q1 2026 guidance of $2.95–$3.10.

Revenue

Revenue for the quarter totaled $3.17 billion, a 0.6% decline from $3.19 billion in the prior-year period. Americas revenue dropped 1.3% to $1.29 billion, while Asia saw a 1% increase to $869.8 million. Europe posted a notable 8% year-over-year growth to $789.4 million, driven by favorable currency and non-helium pricing. The Middle East and India segment reported $32 million in revenue, and the Corporate and other category saw a sharp 27.9% decline to $185.6 million, primarily due to the LNG divestiture.

Earnings/Net Income

The company’s adjusted EPS for Q4 2025 came in at $3.39, a 5% decrease from $3.56 in the prior-year quarter. GAAP EPS, however, plummeted to $0.02 from $8.76, reflecting one-time charges tied to business and asset actions. Despite the year-over-year decline, the company exceeded analyst estimates, showcasing resilience in core operations.

Post-Earnings Price Action Review

The strategy of purchasing APD shares following a revenue increase quarter-over-quarter on the earnings report date and holding for 30 days has historically outperformed the S&P 500. Over the past three years, this approach yielded a 20.56% return, outpacing the S&P 500’s 16.78% return. The initial 30-day period included a brief dip, but the stock recovered strongly, underscoring its long-term potential.

CEO Commentary

CEO Eduardo Menezes emphasized progress in high-return industrial gas projects, cost management, and organizational right-sizing. He expressed confidence in improving margins and unlocking shareholder value through disciplined execution and customer relationship focus.

Guidance

For fiscal 2026, Air Products anticipates adjusted EPS of $12.85–$13.15 and Q1 2026 adjusted EPS of $2.95–$3.10. Capital expenditures are expected to reach approximately $4 billion, excluding unpredictable events and future investments.

Additional News

Recent developments include a 43rd consecutive year of dividend increases, with $1.6 billion returned to shareholders in fiscal 2025. The company also announced 3,600 headcount reductions since 2022, aiming for $250 million in annual savings. Additionally, the NEOM hydrogen project is 90% complete, with full product availability expected in 2027. These moves underscore Air Products’ commitment to operational efficiency and long-term value creation.

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The company’s 2026 outlook reflects a strategic pivot toward core industrial gas projects, with a focus on hydrogen and helium markets. Management remains optimistic about margin expansion and operational resilience despite challenges in helium and project exits. Investors are advised to monitor the NEOM project’s progress and the impact of cost-saving initiatives on future performance.