Praxair Posts In-Line 4Q Results

Praxair Inc. (PX) reported its financial results for the fourth quarter 2012 with adjusted earnings per share coming in at $1.38; 2 cents above the year-ago earnings of $1.36 and in line with the Zacks Consensus Estimate.

For 2012, adjusted earnings per share were recorded at $5.57, way above the year-ago earnings of $5.43 but in line with the Zacks Consensus Estimate. Including certain non-GAAP items, GAAP earnings for the year were $5.61 per share.

Earnings for both the quarter and the year were within management’s predicted range of $1.35-$1.40 and $5.54-$5.59, respectively.

Revenue: Total revenue in the fourth quarter was $2,799 million, up 0.1% year over year as favorable price and acquisition impacts were offset by negative foreign currency translation.

During the quarter, healthy performance at manufacturing, energy, and metals markets helped push North American revenue by 2% to $1,416 million. Revenue in Europe declined 5% to $363 million with the fall largely triggered by a negative foreign currency impact.

Revenue in South America decreased 9% to $484 million while that in Asia was up 12% to $374 million, driven by a volume growth in India, China and Korea. Surface Technologies revenue was $162 million in the quarter versus $160 million in the year-ago quarter.

For 2012, total revenue was $11,224 million, compared with $11,252 million in 2011.

Margins: Cost of sales in the quarter plummeted 0.9% year over year and represented 56.6% of the total revenue. Operating profit was down slightly to $616 million while operating margin stood at 22.0% versus 22.1% in the year-ago quarter.
    
Balance Sheet: Exiting the fourth quarter, Praxair’s cash and cash equivalents increased 45.4% sequentially to $157 million while long-term debt balance also shot up 4.6% to $6,685.0 million.

Cash Flow: Cash flow generated from operating activities in the fourth quarter amounted to $879 million, up from $791 million in the year-ago quarter. Capital spending shot up 2.4% to $586 million, with a major portion being invested for a new production plant setting.

Share Repurchases/Dividends: Praxair pursues a consistent strategy of returning cash to shareholders through dividend payments and share repurchases.