Praxair Reports First-Quarter 2013 Results

Praxair Reports First-Quarter 2013 Results

April 24, 2013

  • First-quarter sales of $2.9 billion; adjusted diluted EPS of $1.38*

  • Completed acquisition of NuCO2 micro-bulk carbon dioxide business

  • Announced signing of North West Redwater energy project, supply of 2,000 tons per day of oxygen in Alberta; project development activity remains solid

  • Adjusted diluted EPS guidance: 2013 full-year $5.90 to $6.05* and 2Q13 $1.45 to $1.50

DANBURY, Conn., April 24, 2013 -- Praxair, Inc. (NYSE: PX) reported first-quarter net income and diluted earnings per share of $391 million and $1.30, respectively.  These results include the impact of a $23 million pre-tax charge, or 8 cents of diluted earnings per share, related to currency devaluation in Venezuela.  Excluding this charge, adjusted net income and earnings per share were $414 million and $1.38, respectively.* 

Sales in the first quarter were $2,888 million, an increase of 2% compared to the prior-year quarter.  On a comparable basis, sales grew 4%, excluding foreign currency, cost pass-through and fewer working days.  Sales growth was driven by Asia and South America.  Growth moderated in North America and weakened further in Europe.

Reported operating profit in the first quarter was $600 million.  Adjusted operating profit was $623 million, 1% below the prior-year quarter.  Excluding currency and day count effects, adjusted operating profit rose modestly driven by price, productivity gains and acquisitions.  Adjusted operating profit as a percentage of sales was 21.6%.*

First-quarter cash flow from operations was $472 million and capital spending was $466 million, primarily for new production plants under long-term contracts with customers.  Acquisition expenditures were $1,098 million, related primarily to the acquisition of NuCO2.  The company paid dividends of $178 million and repurchased $117 million of stock, net of issuances.  During the quarter, the company issued $400 million of 3-year notes at 0.75%, $500 million of 5-year notes at 1.2% and $500 million of 10-year notes at 2.7%.  The after-tax return-on-capital and return on equity for the quarter were 13.3% and 28.1%, respectively.*

Commenting on the financial results and business outlook, Chairman and Chief Executive Officer Steve Angel said, “During the first quarter, Praxair saw varied growth rates across our geographic segments.  Our Asia business grew sales at double-digit rates in China and Korea, due primarily to project start-ups.  Sales in Brazil improved in March driven by manufacturing and construction.  North American sales reflect solid underlying fundamentals with some deceleration of the growth rate.

For the balance of the year, we expect base volumes to grow modestly given the current uncertainty in the macro-economic environment.  Additionally, we will be starting up several large hydrogen projects as well as a number of air separation plants that will contribute to earnings growth.”

For the second quarter of 2013, Praxair expects diluted earnings per share in the range of $1.45 to $1.50.

For the full year of 2013, Praxair expects sales in the area of $12 billion.  The company expects adjusted diluted earnings per share to be in the range of $5.90 to $6.05.  Full-year capital expenditures are expected to be in the range of $1.8 to $2.0 billion, and the adjusted effective tax rate is forecasted to remain at about 28%.*

Following is additional detail on first-quarter 2013 results by segment.

In North America, first-quarter sales were $1,457 million, 4% above the prior-year quarter.  Acquisitions of packaged gas distributors and NuCO2, a United States micro-bulk carbon dioxide provider, contributed 3% growth.  Base business sales were steady as higher pricing was offset by lower volumes, primarily due to fewer selling days in the quarter.  Total sales growth was strongest to energy, manufacturing and food & beverage customers.  Operating profit was $358 million.

In Europe, first-quarter sales were $370 million, down 2% versus the respective 2012 period.  Sales were negatively impacted by lower industrial economic activity resulting in lower packaged gases volumes in Spain and Italy.  Operating profit was $62 million in the quarter, as compared to $68 million in the prior-year quarter, primarily due to lower volumes.

In South America, first-quarter sales were $531 million.  Sales grew 3% from the prior-year quarter, excluding a 10% negative currency impact, primarily due to higher volumes and price.  Operating profit was $114 million as compared to $115 million in the prior-year period due to higher volumes and pricing offset by negative currency translation.

Sales in Asia were $367 million in the quarter, up 10% from the prior year driven by volume growth in India, China, Korea and Thailand.  Sales growth came primarily from metals and chemicals customers.  Operating profit was $63 million, as compared to $57 million in the prior year, due primarily to higher volumes.

Praxair Surface Technologies had first-quarter sales of $163 million as compared to $169 million in the prior-year quarter.  Sales decreased 4%, primarily from lower sales of industrial and military aviation coatings.  Operating profit was $26 million as higher price and productivity benefits offset the impact of weaker volumes. 

About Praxair
Praxair, Inc. is the largest industrial gases company in North and South America, and one of the largest worldwide, with 2012 sales of $11 billion. The company produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings. Praxair products, services and technologies are making our planet more productive by bringing efficiency and environmental benefits to a wide variety of industries, including aerospace, chemicals, food and beverage, electronics, energy, healthcare, manufacturing, metals and others. More information on Praxair, Inc. is available on the Internet at

*See the attachments for calculations of non-GAAP measures.  First-quarter 2013 results are adjusted to exclude a charge of $23 million, or 8 cents per diluted share, related to the Venezuela currency devaluation.  Guidance for adjusted diluted earnings per share for the full year 2013 excludes the Venezuelan currency devaluation and the impact of any pension settlement charges expected to be recorded in the third quarter.

Attachments: Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information, Quarterly Financial Summary, and Appendix: Non-GAAP Measures.

Praxair 1Q13 Earnings Release -Tables 
Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information, Quarterly Financial Summary, and Appendix: Non-GAAP Measures.
Praxair 1Q13 Teleconference Slides 
Teleconference presentation on Praxair's 1Q13 results.

teleconference on Praxair’s first-quarter results is being held this morning, April 24, at 11:00 a.m. Eastern Time.  The number is (617) 213-8831 -- Passcode: 19538377.  The call also is available as a web cast at  Materials to be used in the teleconference are also available.

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are based on management’s reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties.  These risks and uncertainties include, without limitation: the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates; the cost and outcomes of investigations, litigation and regulatory proceedings; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business.  These risks and uncertainties may cause actual future results or circumstances to differ materially from the projections or estimates contained in the forward-looking statements.  Additionally, financial projections or estimates exclude the impact of special items which the company believes are not indicative of ongoing business performance.  The company assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances.  The above listed risks and uncertainties are further described in Item 1A (Risk Factors) in the company’s Form 10-K and 10-Q reports filed with the SEC which should be reviewed carefully.  Please consider the company’s forward-looking statements in light of those risks.

Media Contact:
Jacqueline Hunt


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Investor Relations Contact:
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