Airgas Ups Dividend, Names New CEO

Airgas posted a better-than-expected quarterly profit, hiked its dividend 25%, and named a new chief executive so its founder can focus more on growth projects, all bullish signs of rising demand for industrial gas.

The company supplies canisters of oxygen, argon and other gases used in construction, healthcare, entertainment and dozens of other industries. It primarily operates in the United States, making its results a key indicator of the nation's industrial and economic health.

Last year Airgas successfully fended off a hostile $5.9 billion takeover bid from rival Air Products and Chemicals, in part by insisting that its shareholders would see a greater return if the deal did not go through.

Peter McCausland founded the company in 1982 and, except for a short time during the takeover battle, has been chief executive and chairman since the company went public in 1987.

McCausland, 61, will be replaced as CEO in August by Michael Molinini, 60, who is currently chief operating officer and has worked at the company for 15 years.

"I am confident that Mike is the right person to serve as Airgas' next CEO and that he will continue to build on our 30-year track record of operational excellence and shareholder value creation," McCausland said in a statement on Thursday.

McCausland, the company's largest shareholder, will focus on growth strategies; the company has primarily grown through acquisitions of small gas suppliers and retail locations throughout the United States.

Both men will effectively share some responsibilities traditionally associated with the CEO position.

McCausland will continue to oversee corporate development and risk management. Molinini will oversee human resources and finance, in addition to his current responsibilities as chief operating officer.

On a conference call with investors on Thursday, McCausland stressed that the change was part of "extensive leadership succession planning."

Results & guidance

For the fiscal fourth quarter ended March 31, net earnings were $88 million or $1.12 per share, compared with earnings of $62.8 million or 74 cents per share in the same quarter of 2011.

Excluding restructuring charges and other one-time items, earnings were $1.11 per share.

By that measure, analysts had expected earnings of $1.07 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 13% to $1.24 billion. Analysts expected $1.22 billion.

For the fiscal first quarter, Airgas expects to earn $1.12 to $1.16 per share. Analysts expect the company to earn $1.16 for that period.