Airgas Q3 Profit Meets View, Sales Top; Trims Q4, 2015 EPS Outlook

(RTTNews) - Packaged gas distributor Airgas, Inc. (ARG) reported Tuesday a profit for the third quarter that grew from last year, despite lower operating margins, reflecting revenue growth. Earnings per share for the quarter matched analysts' expectations, while quarterly net sales topped their estimates by a whisker. The company also trimmed its earnings outlook for the fourth quarter and full-year 2015.

"Organic growth in both hardgoods and gases were in line with our expectations, and earnings were in the middle of our guidance range. Although softness persists in some sectors, our welder and generator rental business and sales to transportation equipment manufacturers remained strong, and we saw an uptick in our downstream energy and non-residential construction segment," President and CEO Michael Molinini said in a statement.

The Radnor, Pennsylvania-based company reported net earnings of $93.20 million or $1.23 per share for the third quarter, higher than $82.76 million or $1.10 per share in the prior-year quarter, which included $0.08 per share of loss on debt extinguishment.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $1.23 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 7 percent to $1.33 billion from $1.24 billion in the same quarter last year, and topped thirteen Wall Street analysts' consensus estimate of $1.31 billion by a whisker. Organic sales increased 6 percent.

Gas and rent revenues for the quarter grew 5 percent to $842.56 million, and hardgoods sales also increased 6 percent to $489.26 million from the year-ago quarter.

Operating margin for the quarter contracted 30 basis points to 12.2 percent from last year's 11.9 percent.

Looking ahead to the fourth quarter, the company trimmed its earnings guidance to a range of $1.25 to $1.30 per share from the prior forecast of $1.32 to $1.37 per share, on assumed year-over-year organic sales growth rate of 6 to 7 percent. Analysts currently expect earnings of $1.33 per share on sales growth of 7 percent to $1.36 billion for the quarter.

For fiscal 2015, the company now projects earnings in the range of $4.95 to $5.00 per share, down from the previous forecast in the range of $5.00 to $5.10 per share. Street is currently looking for full-year 2015 earnings of $5.05 per share.

In Tuesday's regular trading session, ARG is currently trading at $114.43, up $0.25 or 0.22% on a volume of 0.10 million shares.