Air Products and Chemicals (APD) Q4 2026 Earnings Report

The call was predominantly positive, with strong fiscal 2026 growth, improved margins and return on capital, substantial cost reductions, a larger industrial gas backlog, and fiscal 2027 expectations for further EPS, margin and cash flow improvement. These strengths were moderated by helium-related headwinds, higher nonoperating costs and taxes, challenging external markets, and underperforming energy transition projects that require significant remaining capital but are not expected to contribute materially to future operating income.

For fiscal 2027, Air Products expects earnings per share within the range of $14.15 to $14.50, an improvement of 5% to 8% from the prior year, including an approximate $50 million benefit from its existing cost reduction plan, modest market volume growth, around 2% volume growth overall and another 3% from new assets; equity affiliate income is expected to be flat, nonoperating items are expected to be a 2% headwind, the tax rate is expected to be 19%, and there is no material financial impact expected from NEOM. First-quarter earnings per share are expected within the range of $3.35 to $3.45, up 6% to 9% from the prior year, with a helium headwind in the first quarter, while helium is expected to stabilize for the full fiscal year and guidance is to be neutral. Capital expenditures are expected within the range of $3 billion to $3.5 billion, including over $1 billion for traditional industrial gas growth projects, and net cash flow is expected to be positive; approximately $1.5 billion of the little over $2 billion remaining for energy transition projects is expected to be spent in 2027, the balance in 2028 and 0 in 2029. The company expects a sizable improvement in margins, continued maintenance-cost reductions, and a long-term traditional industrial gas backlog in the range of $4 billion to $4.5 billion supporting $1.5 billion to $2 billion of annual project starts.