Air Products and Chemicals, Inc. APD is slated to release second-quarter fiscal 2025 results before the opening bell on May 1.

The company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while meeting once, with the average surprise being roughly 3.4%. 

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 14% over a year compared with the 24.6% decline of its industry.

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What Do APD’s Revenue Estimates Say?

The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $2,950 million, up 0.7% from the year-ago reported number.

The consensus estimate for the Americas segment’s revenues is currently pegged at $1,350 million, indicating a decrease of 0.2% year over year.

The same for the Asia segment’s revenues is pegged at $782 million, which suggests a 3.5% year-over-year decline.

The consensus estimate for the Europe segment’s revenues is pinned at $686 million, indicating an 8.5% year-over-year decrease.

Factors to Watch

Air Products is expected to have benefited from its investments in high-yield industrial gas projects and productivity initiatives. It is committed to its gasification approach and is carrying out its expansion plans. These projects are expected to have added to earnings and cash flows.

Air Products is also increasing productivity to enhance its cost structure. It is expected to have experienced positive results from its productivity actions in the quarter to be reported. Additional productivity and cost optimization measures are likely to have strengthened its margins. Air Products anticipates productivity gains of at least $75 million in fiscal 2025. Despite the inflationary environment, APD is focused on improving pricing. 

The slowdown in China and Europe may have adversely impacted Air Products' business across both markets. The slowing Chinese economy continues to be a drag. A delayed economic recovery in China, as well as a slowdown in electronics, might have hurt second-quarter volumes.  

Air Products is also likely to have faced weak demand for merchant products in Europe. The Uzbekistan facility upgrades impacted volumes in Europe in the fiscal first quarter. Continued headwinds from the Uzbekistan plant maintenance are likely to be reflected in the fiscal second-quarter performance.

What Our Model Unveils for APD

Our proven model predicts an earnings beat for APD this time around. 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.

Earnings ESP: Earnings ESP for APD is +0.18%. The Zacks Consensus Estimate for earnings for the fiscal second quarter is currently pegged at $2.84 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 #3.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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 they have the right combination of elements to post an earnings beat this quarter:

Methanex Corporation MEOH, slated to release earnings on April 30, has an Earnings ESP of +4.74% and carries a Zacks Rank #3. The consensus estimate for MEOH’s earnings for the first quarter is currently pegged at $1.25. You can see the complete list of today’s Zacks #1 Rank stocks here.

ATI Inc. ATI, slated to release earnings on May 1, has an Earnings ESP of +2.46% and carries a Zacks Rank #3 at present. The consensus mark for ATI’s first-quarter earnings is currently pegged at 58 cents.

Kinross Gold Corporation KGC, scheduled to release first-quarter earnings on May 6, has an Earnings ESP of +11.07%. The Zacks Consensus Estimate for Kinross Gold's earnings for the first quarter is currently pegged at 22 cents. KGC currently carries a Zacks Rank #2.




 

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This article originally published on Zacks Investment Research (zacks.com).

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