Ceramic Industry News

Praxair Reports Record Third Quarter Results (posted 11/11/08)

Praxair achieved net income and earnings per share growth of 16% and 18%, respectively, vs. the third quarter of 2007.

Praxair, Inc. recently reported record net income of $355 million and diluted earnings per share of $1.11 in the third quarter of 2008, compared to $305 million and $.94, respectively, in the prior year. This represents net income and earnings per share growth of 16% and 18%, respectively, vs. the third quarter of 2007. Sales in the third quarter were $2,852 million, up 20% from $2,372 million in the prior-year quarter. Praxair achieved strong sales growth in every geographic region, led by South America and Asia. Operating profit was a record $544 million, 18% above the $460 million in the prior-year quarter, driven by higher pricing and volume growth.

The company generated strong cash flow from operations of $630 million. Cash flow funded $405 million of capital expenditures, largely for new production plants under contract for customers in North and South America, China, and India. The company also repurchased $537 million of stock, net of issuances. Debt levels increased to finance the share repurchases, resulting in a modestly higher debt-to-capital ratio of 48.7%.

In North America, third quarter sales were $1,557 million, 19% above the prior year. Excluding the effect of higher natural gas prices passed through to customers in hydrogen prices, sales growth was 14%. Acquisitions of U.S. packaged gas distributors contributed 4% to sales growth. Underlying growth of 9% was driven by diverse markets, including energy, metals, manufacturing and chemicals. Operating profit grew 12% to $274 million.

In Europe, sales in the third quarter of $384 million grew 18% from $325 million in the prior-year quarter. Currency effects contributed 13% to sales growth. Underlying sales growth came primarily from higher merchant and on-site gases in Spain, Germany and Italy. Third quarter operating profit of $96 million rose 23% from the prior-year period.

In South America, third quarter sales of $527 million grew 26% vs. the prior-year quarter. Higher prices and volumes drove 14% sales growth, and favorable currency effects contributed 12%. Sales growth came primarily from higher sales to customers in metals, food and beverage, and general manufacturing markets. Operating profit rose 32% to $111 million in the quarter, as higher prices and productivity programs more than offset cost inflation.

Sales in Asia rose 26% to $239 million in the quarter, attributable primarily to new plant startups and growth in merchant liquid sales. Overall sales growth in the region was driven by demand from chemicals and electronics customers, and by applications in general industries such as food and water treatment. Operating profit in the quarter grew 27% to $38 million from the prior-year period.

Praxair Surface Technologies achieved third quarter sales of $145 million, 10% above the prior-year quarter. Sales growth excluding currency effects was 3%, driven by higher sales to energy markets, partially offset by lower sales to aviation markets. Operating profit of $25 million was 4% above the 2007 quarter.

New business development was strong with a number of major new contracts, including a second coal gasification oxygen supply system in China and two world-scale hydrogen plants for BP in Indiana. The company’s backlog of major new projects coming on stream over the next three years increased from 44 to 47, which will underpin growth and earnings stability due to take-or-pay contracts, and customers in diverse geographies and end markets.

Commenting on the results and business outlook, Chairman and Chief Executive Officer Steve Angel said, “We had another very strong quarter despite some effect from the U.S. Gulf Coast hurricanes, and slowing macroeconomic growth in the U.S. and Europe. Due to the financial crisis, we expect to see a contraction in manufacturing output in the U.S. and Europe, combined with slowing growth in Asia and South America for the next several quarters. Additionally, we expect the recent strengthening of the dollar to impact consolidated sales and earnings growth by about 8% at current exchange rates. Consequently, we will take appropriate measures to properly align our cost structure as necessary. We remain confident in our business strategy and the ability of the Praxair team to continue to perform given whatever economic challenges we face.”

For the fourth quarter of 2008, Praxair expects diluted earnings per share in the range of $1.03 to $1.08, excluding the impact of potential restructuring costs. This represents earnings growth of 5 to 10% above the fourth quarter of 2007 and assumes a negative impact due to currency translation in the area of 8% based on current exchange rates.

For the full year of 2008, Praxair expects sales of about $11 billion, representing year-over-year growth of about 17%. The company expects diluted earnings per share to be in the range of $4.21 to $4.26, excluding the impact of potential restructuring costs, and the $.03 pension settlement charge that occurred in the first quarter of 2008. This represents growth of 16 to 18% vs. 2007. Full-year capital expenditures are expected to be about $1.5 billion, supporting an increasing number of contracts for on-site production plants globally that will come on-stream over the next several years.

For more information, visit www.praxair.com.


Did you enjoy this article? Click here to subscribe to Ceramic Industry Magazine.

You must login or register in order to post a comment.



Image Galleries

December 2014 Issue Highlights

Our December 2014 issue is now available! Posted: April 27, 2015.


Ceramics Expo podcast
Editor Susan Sutton discusses the upcoming Ceramics Expo with event director Adam Moore.
More Podcasts

Ceramic Industry Magazine

CI April 2015 edition

2015 April

You'll want to check out our continuing coverage of the inaugural Ceramics Expo event, plus articles on dental ceramics, glass coatings, refractories, and more!

Table Of Contents Subscribe

Daily News

We know where you find the latest ceramic industry news (ahem), but where do you catch up on the rest of your daily news?
View Results Poll Archive


M:\General Shared\__AEC Store Katie Z\AEC Store\Images\Ceramics Industry\handbook of advanced ceramics.gif
Handbook of Advanced Ceramics Machining

Ceramics, with their unique properties and diverse applications, hold the potential to revolutionize many industries, including automotive and semiconductors.

More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.


facebook_40px twitter_40px  youtube_40pxlinkedin_40google+ icon 40px


CI Data Book July 2012

Ceramic Industry's Directories including Components, Equipment Digest, Services, Data Book & Buyers Guide, Materials Handbook and much more!