Air Products Posts $2.2 Billion Charge on Project Exits
The industrial-gas supplier disclosed pre-tax charges of up to $2.9 billion tied to exiting its Louisiana Clean Energy Complex.
Air Products & Chemicals (APD) recorded a fiscal third-quarter charge of up to $2.9 billion before taxes, or approximately $2.2 billion after taxes, as the industrial-gas supplier exited its Louisiana Clean Energy Complex and other smaller clean-energy projects. The disclosure marked a sharp reversal for a company that had raised adjusted earnings guidance just two months earlier.
The quarter underscored the financial toll of Air Products’ strategic pivot away from large-scale clean-energy investments. While adjusted earnings per share had climbed 19% year-over-year in the prior quarter to $3.20, the latest charge overshadowed those gains. The company did not update its full-year adjusted EPS guidance of $13.00 to $13.25, which had been raised in April after holding steady at $12.85 to $13.15 in January.
Revenue in the fiscal second quarter, reported in April, rose 9% year-over-year to $3.2 billion, accelerating from a 6% increase in the prior quarter. Volume growth contributed 4 percentage points to the gain, while favorable currency and higher energy cost pass-through each added another 4 and 2 points, respectively. Helium pricing continued to weigh on results, though pricing improvements in other product lines partially offset the drag.
Asia drove much of the growth, with segment sales up 8% year-over-year to $833 million and operating income surging 25% to $240 million. Operating margin in the region expanded 410 basis points to 28.8%, outpacing gains in the Americas and Europe. The Americas segment saw sales rise 8% to $1.4 billion, though operating income grew just 2% to $374 million. Europe’s 8% revenue increase to $789 million was led by a 9% boost from currency, but operating margin slipped 10 basis points to 26.8%.
Capital expenditures for fiscal 2026 remained unchanged at approximately $4.0 billion, matching prior guidance. The company also finalized a marketing and distribution agreement with Yara for renewable ammonia from the NEOM Green Hydrogen Project in Saudi Arabia, signaling continued investment in select clean-energy initiatives.
The charges follow a pattern of write-downs in recent quarters. Air Products recorded $3.7 billion in pre-tax charges during fiscal 2025, including $795 million in the fourth quarter, tied to business and asset actions. The latest exit from the Louisiana project and other smaller ventures suggests a broader retreat from high-risk energy projects amid shifting market conditions.