Air Products and Chemicals, Inc. APD is slated to release first-quarter fiscal 2025 results before the opening bell on Feb. 6.

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The company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missing once, with the average surprise being roughly 2%. It delivered an earnings surprise of 3.5% in the last reported quarter. 

The company is expected to have benefited from actions to boost productivity and improve its cost structure in the to-be-reported quarter amid headwinds from a slowdown in Europe and China.

APD’s shares have gained 60.9% over a year compared with the 70.3% rise of its industry.

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What Do Revenue Estimates for APD Say?

The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $3,005.9 million, roughly flat with the year-ago reported number.

The consensus estimate for the Americas segment’s revenues is currently pegged at $1,296.8 million, indicating an increase of 3.6% year over year.

The same for the Asia segment’s revenues is pegged at $800.9 million, which suggests a 0.9% year-over-year rise.

The consensus estimate for the Europe segment’s revenues is pinned at $729.6 million, indicating a 0.2% year-over-year decrease.

Factors to Watch 

Air Products is focused on its gasification strategy and implementing growth initiatives. These projects are expected to add to earnings and cash flows.

Air Products is expected to have benefited from actions to drive productivity and enhance its cost structure in the fiscal first quarter. It is witnessing positive results from its productivity actions. Additional productivity and cost optimization measures are likely to have supported its margins. The company is also anticipated to have benefited from price increase measures amid an inflationary environment.

The slowdown in China and Europe may have had an adverse impact on Air Products' business in both regions.  The slowing Chinese economy will continue to be a drag. A delayed economic recovery in China and a weakness in the electronics market are likely to have affected its volumes. 

Air Products is seeing sluggish demand for merchant products in Europe, which is expected to have continued in the fiscal first quarter. The volumes in Europe remained steady in the fiscal fourth quarter, with the contribution of new assets in Uzbekistan offsetting lower merchant volumes. In the short term, Europe's lack of industrial output growth is cause for concern.

What Our Model Unveils for APD

Our proven model does not conclusively predict an earnings beat for Air Products this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for APD is 0.00%. The Zacks Consensus Estimate for earnings for the fiscal first quarter is currently pegged at $2.86 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: APD currently carries a Zacks Rank #4 (Sell).

Basic Materials Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:

CF Industries Holdings, Inc. CF, slated to release its earnings on Feb. 19, has an Earnings ESP of +1.70% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. The consensus estimate for CF’s fourth-quarter earnings per share is currently pegged at $1.49.

Avient Corporation AVNT, slated to release earnings on Feb. 13, has an Earnings ESP of +0.11% and carries a Zacks Rank #3 at present. The consensus mark for AVNT’s fourth-quarter earnings is currently pegged at 48 cents.

DuPont de Nemours, Inc. DD, slated to release earnings on Feb. 11, has an Earnings ESP of +0.06% and carries a Zacks Rank #3 at present. The consensus mark for DD’s fourth-quarter earnings is currently pegged at 98 cents.




 

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