Praxair, Air Products Say Order Backlog to Fuel 2013 Growth
Industrial gas suppliers Praxair and Air Products and Chemicals expect their order backlog to prop up results this year despite weak economic growth in most of their markets.
Air Products and Praxair have already raised prices of some industrial gases they sell -- such as argon for welding, carbon dioxide for surgeries, oxygen for making steel and hydrogen for refining heavy crude -- to offset rising costs.
"Global economic growth is expected to be modest at best so we will continue to take actions to improve our performance," said Air Products Chief Executive John McGlade, adding that "price improvement" was one of the company's priorities.
Air Products's bigger rival Praxair, the largest industrial gas supplier in the Americas, said revenue this year is expected to grow 7% to about $12 billion, with large projects contributing a backlog of $2.6 billion.
Analysts on average had expected revenue of $11.96 billion, according to Thomson Reuters I/B/E/S.
Air Products, the world's largest supplier of hydrogen, raised its full-year earnings forecast to a range of $5.70 to $5.90 per share, citing its backlog.
Given the lingering weakness in their traditional markets of North America and Europe, Praxair and Air Products have been looking to increase their presence in Asia and South America.
During the fiscal year ended Sept. 30, Air Products took a majority stake in Chile's industrial gas supplier Indura, bought the other half of its DA NanoMaterials joint venture with DuPont and took a 25% stake in AHG, the largest industrial gases company in Saudi Arabia.
Connecticut-based Praxair, which generated more than half of its sales in 2011 outside the United States, in October said it would trim 410 jobs by the end of 2013, mainly in Europe -- its third-biggest market.
The more-than-century-old company reported on Wednesday that fourth-quarter net income slipped 1% to $414 million as weak sales in Europe and South America offset a strong performance in Asia.
Praxair raised its quarterly stock dividend by 9% to 60 cents per share.
Allentown, Pennsylvania-based Air Products, with operations in more than 50 countries, reported a 23% rise in net income from continuing operations in the first quarter ended Dec. 31.
Revenue increased 10% to $2.56 billion.
