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(Archived) Praxair Reports First-Quarter 2011 Results

  • Sales of $2.7 billion, 11% above prior-year quarter
  • Diluted EPS of $1.29, up 18%*
  • Strong pipeline of growth projects in emerging economies
  • Raises full-year 2011 diluted EPS guidance to $5.35 - $5.45
  • Second-quarter diluted EPS guidance of $1.33 to $1.38

DANBURY, Conn., April 27, 2011 — Praxair, Inc. (NYSE: PX) reported first-quarter net income and diluted earnings per share of $398 million and $1.29, 17% and 18% above the prior-year quarter, respectively*.

Sales in the first quarter were $2,702 million, 11% above the previous-year quarter, due primarily to broad-based volume growth. Sales increased across all geographic regions with strongest growth from manufacturing, metals, chemicals and electronics markets. Sales rose 3% sequentially from the fourth quarter of 2010 due to higher volumes and price.

Operating profit in the first quarter was $591 million, up 17% from the prior-year quarter due to higher volumes, higher price and productivity.* Earnings before interest, taxes, depreciation and amortization (EBITDA) of $844 million grew by 14% from the prior-year period.*

First-quarter cash flow from operations was $359 million and capital spending was $334 million. The company paid dividends of $152 million and repurchased $138 million of stock, net of issuances. The debt-to-capital ratio was 47.2% and debt to EBITDA was 1.7x.* Also, the company extended the maturity of its debt profile by issuing $500 million of 10-year notes. The after-tax return-on-capital ratio and return on equity for the quarter were 14.4% and 26.6%, respectively.*

Commenting on the results and business outlook, Chairman and Chief Executive Officer Steve Angel said, “Praxair kicked off the year with solid volume growth. The emerging markets, primarily South America and Asia, grew at double-digits, while our business in North America benefitted from steady economic recovery in the U.S. We continue to successfully execute pricing and productivity initiatives as reflected in the first-quarter operating margin of 22%.

“New project opportunities remain robust and during the quarter we signed new on-site supply agreements in nearly all of our major markets representing future capital investment of over $500 million. Revenues from these projects will be realized over the next several years as they come on stream.”

For the second quarter of 2011, Praxair expects diluted earnings per share in the range of $1.33 to $1.38.

For the full year of 2011, Praxair expects sales in the area of $11 billion. The company expects diluted earnings per share to be in the range of $5.35 to $5.45. Full-year capital expenditures are expected to be in the range of $1.6 billion to $1.8 billion, and the effective tax rate is forecasted to remain at about 28%.

Following is additional detail on first-quarter 2011 results by segment.

In North America, first-quarter sales were $1,334 million, up 8% from the prior-year quarter. Volumes were 6% above the prior year largely attributable to higher sales to manufacturing, chemicals, metals and energy markets. Operating profit of $322 million grew 16% from the prior year due primarily to higher volumes and productivity.

In Europe, first-quarter sales were $343 million, up 4% from the prior year, excluding negative currency effects. The underlying sales increase was due to volume growth in Germany, Italy and Spain. Operating profit was $65 million in the quarter, compared to $67 million in the prior-year, due primarily to currency effects.

In South America, first-quarter sales of $558 million grew 22% versus the prior-year quarter, and 15% excluding currency effects. Volumes grew 10% from the prior year due primarily to higher on-site, merchant and packaged gas sales in Brazil to manufacturing, metals, food and beverage and healthcare end markets. Operating profit was $133 million, 22% above the prior-year period, and 16% excluding currency.

Sales in Asia were $310 million in the quarter, up 20% from the prior year driven by strong growth in China, India, and Korea. Sales growth came from electronics, metals, manufacturing and chemical customers. Operating profit was $46 million, 35% above the prior-year quarter, due primarily to higher volumes.

Praxair Surface Technologies had first-quarter sales of $157 million, up 15% from the prior-year quarter. Sales growth came from higher jet engine and industrial coatings volumes. Operating profit of $25 million in the quarter was 32% above the prior-year period due to higher volumes.

Praxair is the largest industrial gases company in North and South America, and one of the largest worldwide. 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

*See the attachments for calculations of non-GAAP measures. First-quarter 2010 results are adjusted to exclude the Venezuela currency devaluation.

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

Praxair 1Q 2011 Earnings Release Tables (92KB)  Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information, Quarterly Financial Summary, and Appendix: Non-GAAP Measures.
Praxair 1Q 2011 Teleconference Slides (218KB)  Teleconference presentation on Praxair's
1Q11 results. 


A teleconference on Praxair’s first-quarter results is being held this morning, April 27, 2011 at 11:00 am Eastern Time. The number is (617) 597-5313 — Passcode: 48821227. 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; 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. 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.


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