Air Products Lowers 2008 Outlook but Remains Optimistic with Strong Project Backlog and Long-Term Contracts

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Researched by Industrial Info Resources (Sugar Land, Texas)--Several factors have prompted Air Products and Chemicals Incorporated (NYSE:APD) (Allentown, Pennsylvania) to lower its earnings outlook for the rest of the year. The company stated that the reasons for the revision include hurricanes Gustav and Ike, which reduced short-term demand in the Gulf Coast region, a slowdown in manufacturing sales in Europe and the continued strengthening of the dollar against the euro. However, John McGlade, Chairman, President and CEO, said in a statement that Air Products remains confident in its growth potential.

"We're continuing to deliver solid top-line growth due to the strong positions we've built across many key markets," David Taylor, Vice President for Air Products' Energy Business said at the Credit Suisse conference just days before the earnings-revision announcement. "The diversity in these markets allows us to generate more stable, consistent revenues, cash flows and earnings relative to many of our peers in the chemical business." He said the company has a high degree of stability in its earnings because more than one-third of Air Products' business is under long-term contracts lasting from 15 to 20 years. Another 30% is under three- to five-year contracts, he added.

Taylor also said that Air Products' project backlog continues to grow and that bidding activity remains high. Industrial Info is tracking 29 active projects that Air Products is involved in as part of our International Project Database. The projects range from a $1 million maintenance turnaround in New Jersey to a $350 million air separation unit addition in Nigeria. Other projects include unit expansions, plant upgrades and grassroot facilities.

Air Products' portfolio of products, services and solutions includes atmospheric gases, process and specialty gases, performance materials, equipment and services. The company operates in more than 40 countries.

Details on how the hurricanes affected the Chemical Processing Industry:

• Hurricane Ike Idles Almost all Ethylene Production in Texas
• Gustav Spares Chemical Industry of Major Damage but Leaves a Wide Path of Plant Disruptions

View Plant Profile - 1019613 1035739
View Project Report - 07002524 84600083

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.