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Sales Growth: Up 8% year-on-year for fiscal 2026.
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Adjusted EPS: $13.45 for fiscal 2026, up 12% year-on-year.
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Operating Income: Grew 11% for fiscal 2026.
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Operating Income Margin: 24.4%, a 70 basis point improvement versus prior year.
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Return on Capital: 11.9%, a 100 basis point improvement versus prior year.
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Equity Affiliate Income: Grew 14% for fiscal 2026.
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Capital Expenditure: Reduced by $1.8 billion versus fiscal 2025; fiscal 2027 CapEx targeted at $3.0$3.5 billion, with over $1 billion toward traditional industrial gas growth projects.
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Net Cash Flow: Achieved neutrality in fiscal 2026; expected to be positive in fiscal 2027.
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Cost Savings: ~$95 million in savings from headcount reduction plan in fiscal 2026; ~$50 million benefit expected in fiscal 2027.
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Workforce Reduction: Headcount reduced 15% since FY’24 peak; ~93% of announced workforce reduction completed.
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Dividends: $1.6 billion paid to shareholders in fiscal 2026.
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Industrial Gas Backlog: ~$3.3 billion, including over $2 billion in electronics-related project wins in the last 12 months.
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Helium Headwind: 3% headwind to fiscal 2026 results; Q1 fiscal 2027 headwind expected from contract renewal pricing.
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Americas Operating Income: Up 8% for fiscal 2026 on on-site volume and new assets.
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Asia Operating Income: Up 15% for fiscal 2026; currency contributed 3%.
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Europe Operating Income: Up 7% for fiscal 2026, including 4% from favorable currency.
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Corporate SG&A: Reduced 10% for fiscal 2026.
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Q4 EPS: Up 6% year-on-year.
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Fiscal 2027 EPS Guidance: $14.15$14.50, up 5%8% year-on-year.
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Q1 Fiscal 2027 EPS Guidance: $3.35$3.45, up 6%9% year-on-year.
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Effective Tax Rate: 19% expected for fiscal 2027, primarily due to lower tax credits.
Release Date: November 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Delivered 8% sales growth and 12% adjusted EPS growth in fiscal 2026, with operating income up 11% and equity affiliate income up 14%.
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Improved operating margin by 70 basis points to 24.4% and return on capital by 100 basis points to 11.9%.
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Reduced capital expenditures by $1.8 billion compared to fiscal 2025 and achieved net cash flow neutrality.
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Grew industrial gas backlog to $3.3 billion, including over $2 billion in electronics project wins in the last 12 months.
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Achieved $95 million in cost savings and completed approximately 93% of workforce reduction, with further productivity gains expected.
Negative Points
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Fiscal 2027 EPS guidance of $14.15-$14.50 implies 5-8% growth, a slowdown from 12% in fiscal 2026.
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Expects a 2% headwind from nonoperating items, including higher interest expense from canceled projects and a higher tax rate of 19%.
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Equity affiliate income is expected to be flat in fiscal 2027, pressuring overall EPS growth.
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Helium faces a first-quarter headwind from lower pricing on a contract renewal and a modest accounting headwind from a change to average cost inventory method.
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Underperforming legacy energy transition projects, including NEOM and Alberta, are not expected to contribute materially to operating income, with over $2 billion in remaining CapEx.
Q & A Highlights
Q: Can you quantify U.S. HyCO volumes for fiscal 2026 and the outlook for 2027, and what gives you confidence in the sustainability of refinery rates? A: CEO Eduardo Menezes said Air Products essentially “sold out” in 2026, with volume growth probably in the mid-single-digit percentage range. Demand from refineries is very strong, so future growth will depend more on the company optimizing production than on market conditions.
Q: What is the cash impact of NEOM in fiscal 2027, who is paying the project financing interest, and when does principal repayment begin? A: CEO Eduardo Menezes confirmed no expected 2027 impact from NEOM. Across the energy transition projectsCanada, the Netherlands and Air Products’ portion of NEOMa little over $2 billion of CapEx remains, with roughly $1.5 billion expected in 2027, the balance in 2028 and zero in 2029. Project financing is in place, but terms with banks and partners are not disclosed.
Q: Are you capturing inflationary costs through pricing as well as competitors, given Linde’s average prices rose about 3%? A: CEO Eduardo Menezes said pricing is very close to competitors, though portfolio differences in packaged gas and hard goods make comparisons imperfect. Extreme inflation, especially in Europe with natural gas near $30 per million BTU and power above EUR200 per megawatt, is passed through to on-site customers under contracts, while merchant pricing lags and should be recovered in the first few months of fiscal 2027.
Q: How are you underpinning the assumption that helium is neutral for fiscal 2027 after a first-quarter headwind, and are customers shifting to longer-term contracts? A: CEO Eduardo Menezes said guidance must overcome negative effects from contract renegotiations started in 2025 and early 2026, plus a change in helium inventory valuation. CFO Melissa Schaeffer said the company is moving to average cost accounting for helium starting in fiscal 2027 to align with industry standards, creating a modest non-cash headwind already included in guidance. Menezes added that storage capacity covers about 40% to 50% of needs for many quarters, supporting long-term contracts, including 15-year helium agreements tied to new on-site plants.
Q: Can you provide color on the early contract termination and asset sale in the Americas, its fourth-quarter benefit, and any drag going forward? A: CEO Eduardo Menezes said the facility is a roughly 60-year-old hydrogen reformer bought during COVID that sits inside a refinery; the customer is buying it back because it can operate the asset at lower cost, making the deal a win-win. CFO Melissa Schaeffer said the transaction will be recognized as a financing agreement, with the net book value removed and a financ
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
