DANBURY, Conn., October 29, 2003 — Praxair, Inc. (NYSE: PX) reported third-quarter 2003 diluted earnings per share of 91 cents. This compares to third quarter 2002 earnings per share of 80 cents, or 85 cents per share* excluding special items in that period.
Sales for the quarter of $1,414 million grew 9% from 2002, and 5% excluding the impact of higher natural gas prices and stronger currencies in Europe and South America. The underlying sales growth was due to higher overall pricing and continued volume growth in overseas markets.
Operating profit was $240 million, compared to $235 million in the prior year. The improvement was driven by revenue growth and strong productivity initiatives.
Net income of $150 million grew 15% from last year due to higher operating profit and lower interest expense, partially offset by a higher effective tax rate.
In North America, sales of $918 million grew 9% from the prior year. Excluding the pass-through effect of higher natural gas prices, sales grew 6%. The growth in sales came largely from higher pricing. Overall gases volumes for the quarter were slightly lower than the prior year; however, volumes improved sequentially towards the end of the quarter, reflecting increased customer demand. Segment operating profit increased to $141 million from $139 million in the prior-year period.
In Europe, sales rose 11% to $168 million. Excluding currency and a divestiture, sales grew 3% from higher price and volumes across the region. Operating profit grew 22% to $44 million, reflecting an improved operating margin from productivity gains and higher capacity utilization rates, in addition to currency gains. South America sales of $187 million grew 21%, and 17% excluding the effect of currency appreciation. Sales grew as a result of higher pricing, and higher volumes to metals and healthcare markets. Operating profit was $29 million versus $37 million in the prior year, which included $5 million of future period hedge gains. Sales in Asia grew 23% to $103 million primarily from strong volume demand, particularly in China. Asia's operating profit grew to $17 million, from $14 million a year ago. Praxair Surface Technologies' sales were $99 million and operating profit was $9 million, both unchanged from the year-ago quarter.
Cash flow from operations for the quarter was $303 million. Capital expenditures during the quarter were $168 million, reflecting costs related to the hydrogen plant construction on the U.S. Gulf Coast. After the net purchase of $103 million of stock during the quarter, the debt to capital ratio* remained at 49.2%.
"We are beginning to see signs of improving conditions in North America," said Dennis H. Reilley, chairman and chief executive officer. "Customer demand has started to strengthen in some markets, but it remains to be seen if this will develop into a sustainable recovery, and if the economy will continue to grow into 2004. However, we believe our ongoing productivity efforts and growth programs will continue to drive earnings higher in the future."
For the fourth quarter of 2003, Praxair expects earnings of 90 to 94 cents per diluted share. For the full year, earnings guidance is $3.51 to $3.55.
Praxair is the largest industrial gases company in North and South America, and one of the largest worldwide, with 2002 sales of $5.1 billion. The company produces, sells and distributes atmospheric and process gases, and high-performance surface coatings. Praxair products, services and technologies bring productivity 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 is available on the Internet at www.praxair.com.
* Non-GAAP Measures; see Quarterly Financial Summary and Appendix: Non-GAAP Measures.
|Praxair 3Q03 Earnings Release Tables (41 KB)||Statements of Income, Balance Sheet, Statement of Cash Flows, Segment Information, Quarterly Financial Summary and Appendix: Non-GAAP Measures|
|Praxair 3Q03 Teleconference Presentation (99 KB)||Teleconference Presentation on Praxair's 3Q03 results.|
A teleconference on Praxair's third-quarter 2003 results is being held this morning, October 29, at 9:00 am Eastern Standard Time. The number is (617) 786-4511 — Passcode: 69159764. The call also is available as a webcast. Materials to be used in the teleconference are available on www.praxair.com/investors.
Forward-Looking Statements: The forward-looking statements contained in this announcement concerning demand for products and services, the expected macroeconomic environment, sales and earnings growth, and other financial goals involve risks and uncertainties, and are subject to change based on various factors. These include the impact of changes in worldwide and national economies, the cost and availability of electric power, natural gas and other materials, development of operational efficiencies, changes in foreign currencies, changes in interest rates, the continued timely development and acceptance of new products and processes, the impact of competitive products and pricing, and the impact of tax and other legislation and regulation in the jurisdictions in which the company operates.