Lehigh Valley, Pennsylvania - Air Products has reported net income of $69 million for its fiscal first quarter ended 31 Dec 2008, with John McGlade, chairman, president and chief executive officer, describing the current situation as "one of the weakest economic environments we've ever seen." This earnings figure includes charges for a previously announced global cost reduction plan and for discontinued operations.
The company said excluding these effects, income was $206 million down 21 percent, compared with that for Q1 2008.
First quarter revenues of $2195 million were 9 percent and operating income of $288 million was 24 percent down from the prior year on weaker volumes, primarily in the Electronics and Performance Materials and Merchant Gases segments, and unfavourable currency exchange rates, said the group.
• In Electronics and Performance Materials, which includes the group's urethane prepolymers business, sales of $407 million showed a 21-percent decline. Operating income of $25 million declined 63 percent from that in Q1 2008, said the company, pointing out that "in Performance Materials, volumes dropped on lower demand from coatings, autos, housing and other end markets." Electronics manufacturing declined significantly on falling consumer demand, Air Products added.
"Over the quarter, we saw further deterioration in business conditions, giving the very weak economic environment, commented McGlade. "It was evident that the shocks to the global economy have shattered consumer confidence, which has significantly impacted customers' operating rates across most of our end markets. In response, we continue to take aggressive actions to reduce our costs and drive to a lower cost structure."
Discussing the outlook for 2009, McGlade said, "While the global economic environment is poor, we continue to build and maintain our strong positions, taking the necessary near-term actions to deliver improvement and growth in the future. We have a good backlog of projects and opportunities in front of us. Our solid balance sheet and access to capital will enable us to take advantage of these opportunities."
In the company's major gas business, Merchant Gases sales of $925 million were 8 percent down due to currency, while operating income of $171 million declined 15 percent from the prior year. And in Tonnage Gases, sales of $744 million were down six percent with operating income of $109 million, a 2-percent drop from the prior year on unfavourable currency impacts and lower volumes.