Industrial gas producer Praxair, Inc. (PX) reported Wednesday a profit for the third quarter that grew six percent from last year, reflecting improved operating margin and sales growth. Earnings per share and quarterly sales missed analysts' expectations.
The company also provided earnings guidance for the fourth quarter, below Street view, and trimmed earnings and sales forecast for the full-year 2014.
"Praxair achieved record earnings per share and again delivered a solid quarter with operating profit growth outpacing sales growth, despite continued slower growth in most emerging markets. Operating margin grew to 22.6%, due to our employees' relentless focus on margin expansion through productivity and price improvements greater than cost inflation," Chairman and CEO Steve Angel said in a statement.
The Danbury, Connecticut-based company posted net income of $477 million or $1.62 per share for the third quarter, higher than $445 million or $1.49 per share in the prior-year quarter, which included a pension settlement charge of $0.02 per share.
On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $1.63 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the quarter grew 4 percent to $3.14 billion from $3.01 billion in the same quarter last year, but missed sixteen Wall Street analysts' consensus estimate of $3.17 billion.
Organic sales grew 5 percent from higher volumes, including new project start-ups, in North America, South America and Asia, as well as higher price across all operating segments.
By end-market, sales growth was strongest for manufacturing, food and beverage, healthcare and metals customers.
Sales in North America were $1.64 billion, up 3 percent from last year, and sales in Europe remained flat with last year at $385 million.
In South America, sales increased 8 percent to $523 million from the prior-year quarter, and sales grew also 11 percent in Asia to $426 million from last year. Praxair Surface Technologies sales toatled $171 million, up from $160 million last year.
Praxair noted that operating profit as a percentage of sales grew to 22.6 percent, primarily driven by higher pricing and productivity gains.
In a separate communiqué, the company declared a quarterly dividend of $0.65 per share for the fourth quarter, payable on December 15 to shareholders of record on December 5, 2014.
Looking ahead to the fourth quarter, Praxair expects earnings in a range of $1.53 to $1.60 per share, while analysts expect earnings of $1.66 per share.
For fiscal 2014, Praxair said it currently expects earnings in a range of $6.23 to $6.30 per share, on projected sales between $12.3 billion and $12.4 billion, compared to the prior forecast for earnings in the range of $6.30 to $6.45 per share and sales between $12.4 billion and $12.7 billion.
Street is currently are looking for full-year 2014 earnings of $6.38 per share on annual revenues of $12.48 billion.
"During the fourth quarter, we are expecting similar underlying business trends and currency headwinds from the recent devaluation of many of our major currencies. Despite these challenges, we will remain focused on operational excellence to ensure we grow free cash flow and earnings per share for our shareholders," Angel added.
PX closed Tuesday's regular trading session at $125.70, down $0.64 on a volume of 2.93 million shares.
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