Air Products shares climb 1.2% on Q1 earnings beat, maintained outlook
Adjusted EPS of $3.16 tops estimates as pricing and margins expand across all regions
Air Products and Chemicals shares advanced 1.2% on Thursday after the industrial gases producer reported fiscal first-quarter earnings that exceeded Wall Street expectations and maintained its full-year guidance, underscoring the strength of its core business despite ongoing helium market challenges.
The Allentown, Pennsylvania-based company reported adjusted earnings per share of $3.16 for the quarter ended December 31, 2025, beating analyst estimates of $3.04. Revenue reached $3.1 billion, topping the $3.05 billion consensus forecast and increasing 6% from the prior year, according to the company's earnings announcement.
Chief Executive Officer Eduardo Menezes attributed the performance to "strong results from the base business," with adjusted operating income rising 12% to $757 million and adjusted operating margins expanding by 140 basis points to 24.4%. The growth was driven by higher pricing and energy cost pass-through, which offset flat volume growth and helium-related headwinds.
"The team remains focused on unlocking earnings growth, optimizing large projects and maintaining capital discipline," Menezes said in a statement.
The company's geographic diversification contributed to the broad-based improvement. In the Americas, sales increased 4% to $1.3 billion on higher energy cost pass-through and pricing, while operating income grew 4% to $404 million. European performance was particularly robust, with sales surging 12% to $782 million and operating income jumping 20% to $224 million, benefiting from favorable currency, higher volumes and improved pricing. Asia sales rose 2% to $832 million, with operating income increasing 7% to $232 million.
Air Products reiterated its full fiscal year 2026 adjusted EPS guidance of $12.85 to $13.15, a range that would represent continued growth from fiscal 2025 levels. For the second quarter, the company expects adjusted EPS between $2.95 and $3.10.
The earnings report comes as Air Products trades below its 200-day moving average of $271.23, with the stock at $256.02 on Thursday morning. The shares have declined from their 52-week high of $341.14 reached earlier in 2025, creating an attractive entry point according to some analysts who have recently upgraded their ratings. Bank of America upgraded the stock to Neutral from Underperform on January 8, while Citigroup raised its price target to $272 from $245 on January 21, according to analyst reports compiled by Investing.com.
The consensus price target among 30 analysts stands at $293.71, suggesting significant upside from current levels, according to market data.
Beyond quarterly results, Air Products continues to execute on strategic initiatives in the energy transition space. In December 2025, the company announced it was in advanced negotiations with Yara International for low-emission ammonia projects in the United States and Saudi Arabia. The company also secured NASA contracts totaling over $140 million to supply liquid hydrogen to several NASA facilities, reinforcing its position in the hydrogen infrastructure market.
Shareholders received additional positive news as the company increased its quarterly dividend to $1.81 per share, marking the 44th consecutive year of dividend increases. The stock currently yields 2.8%.
Capital expenditures totaled $910.7 million in the first quarter, and the company maintained its expectation for full-year capital spending of approximately $4.0 billion, reflecting continued investment in large-scale projects including its Gulf Coast hydrogen network and clean energy initiatives.
Operating cash flow of $900.7 million in the quarter demonstrated the company's ability to generate substantial cash even while investing heavily in growth projects, a factor analysts cite as supporting the company's long-term strategy and dividend growth potential.