Radnor-based Airgas Inc. said today that its second-quarter net income fell 25 percent as sales of industrial, medical and specialty gases declined and the company's profit margin tightened.
"Difficult conditions were broad-based across our geographies and customer segments," CEO Peter McCausland said. "Consistent with recent quarters, our manufacturing customers suffered the deepest declines while our medical business showed the most resilience."
For the three months ended Sept. 30, net income fell to $54.5 million, or 65 cents per share, from $72.8 million, or 86 cents per share, last year. Excluding charges related to pension and debt extinguishment, Airgas earned 68 cents per share, a penny better than analysts expected, according to a Thomson Reuters survey.
Sales declined 17 percent to $962.3 million, while analysts had expected $999.2 million. Meanwhile, sales at stores open at least one year fell 19 percent.
"Although we believe the worst same-store sales declines are now behind us, we remain cautious in our near-term outlook and focused on forward progress for the long run," said McCausland.
The profit margin for Airgas declined to 11.4 percent from 12.5 percent a year ago.
The company said it had undertaken $45 million of annual expense reductions between December and March; some of the benefits were fully reflected in the second-quarter results. And $12 million more annual expense reductions were completed during this quarter, with benefits being seen in the third quarter. And AirGas instituted $10 million more in savings in a continuing efficiency initiative.
For the three months ending in December, Airgas expects adjusted earnings of 67 cents to 70 cents per share. Analysts polled by Thomson Reuters expect earnings per share of 71 cents. Analyst expectations are typically adjusted to exclude onetime items.
For the 12 months ending next March, Airgas now expects adjusted earnings per share of $2.70 to $2.80. Previously the company projected $2.65 to $2.85 per share.
Wall Street anticipates fiscal 2010 profit of $2.78 per share.
Airgas also warned that it could incur charges for the full year of as much as 4 cents per share for withdrawing from certain pension obligations.
Shares were priced at $46.05, up 10 cents, shortly after trading opened today on the New York Stock Exchange.
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