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Air Products' (APD) Rotoflow Opens Center in China, Shares Rise

Air Products and Chemicals Inc. APD shares have gained 5.1% since the announcement of Rotoflow’s new Solutions Center opening on Nov 30. The facility will further expand Rotoflow’s presence in Asia.

 

Air Products’ business, Rotoflow, launched a turbomachinery Solutions Center in the Qingpu district of Shanghai, China, to meet customer needs and project demands. The turbomachinery Solutions Center in Shanghai is the fourth global hub of Rotoflow.

 

The new Center will maintain and repair rotating machinery. The Center will also offer equipment optimization, troubleshooting, and assembly and part cleaning. The Solutions Center will provide maintenance for turboexpanders, cryogenic pumps, reciprocating and centrifugal compressors, small steam and gas turbines, gearboxes, fans, and blowers.

 

The store will not limit itself to repairing only Rotoflow equipment but also serve and repair all brands of expanders. The Rotoflow facility is furnished with the latest diagnostic, testing, balancing, and machining equipment, which will come in handy to better serve the Asia market.

 

Apart from high-quality appliances, the store will have machinery and operations engineers, production technicians, a machinery designer, and a customer care specialist on duty to assist consumers. This business of APD plans to put a local supply chain in use.

 

Air Products acquired Rotoflow in 2018 to deliver seamless product development and the best liquefier performance for end users. With more than 125 years of combined experience in developing, manufacturing and operating turbomachinery, Rotoflow has become well known.

 

Headquartered in Allentown, PA, Air Products makes industrial gasses, as well as a variety of polymer and performance chemicals. It also supplies processing equipment.

 

In the quarter ended Sep 30, 2022, APD reported earnings of $2.89 per share, beating the Zacks Consensus Estimate of $2.77. This compares favorably with the year-ago quarter’s reported earnings of $2.51 per share. It delivered revenues of $3,570 million, up around 26% year over year. The figure beat the Zacks Consensus Estimate of $3,280 million.

 

Increased pricing, rising volumes and higher energy cost pass-through aided the company’s earnings. Volumes were driven by new plants, recovery in hydrogen, and improved merchant demand. However, the results were partially offset by unfavorable currency translation.

 

APD expects adjusted earnings per share of $11.20-$11.50 for fiscal 2023, suggesting 9-12% year-over-year growth. The company expects adjusted EPS of $2.60-$2.80 for the first quarter of fiscal 2023, indicating a rise of 5-13% from the year-ago quarter.

Price Performance

The company’s shares have gained 8.7% in the past year compared to the industry’s growth of 1.6%.

 

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Zacks Rank & Key Picks

Air Products currently carries a Zacks Rank #3 (Hold).

 

Some better-ranked stocks in the basic materials space are CalMaine Foods CALM, Reliance Steel RS and Innospec IOSP. While CALM flaunts a Zacks Rank #1 (Strong Buy) at present, RS and IOSP carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

CalMaine Foods has an expected earnings growth rate of 197.8% for the current year. Its earnings estimates for 2022 are pegged at $8.10 per share. CALM’s earnings estimates have been unchanged in the past 60 days. The stock has gained 63.3% in the past year.

 

Reliance Steel has estimated earnings of $28.71 for the current year, indicating a year-over-year growth rate of 29.8%. The consensus estimate for RS’s earnings for the current year has been revised by 0.06% upward in the past 60 days. It has a trailing four-quarter average surprise of 13.6% on average. RS has gained 38.5% over a year.

 

Innospec has projected a year-over-year earnings growth rate of 30.4% for the current year. The Zacks Consensus Estimate for the company’s current-year earnings is pegged at $6.26. The consensus estimate has been revised north by 5.6% in the past 60 days. IOSP has a trailing four-quarter earnings surprise of 25.6%, on average. Shares of IOSP have jumped 27.6% in a year.

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