Air Products and Chemicals (APD): Air Time

Air Products reported a successful F2026. EPS for F2026 increased 12% from $12.03 to $13.45. Volumes were in positive territory in a difficult operating environment. Its operating income grew 11%, and equity income advanced 14%. Volumes increased 4% and prices were flat. APD share price is 25% higher year to date, versus a close to 8% appreciation for the S&P; it is higher by 30% over the past year versus an S&P that is up 8%. Air Products indicated that it expected to increase its EPS at a slower rate in F2027 in a range of $14.15 to $14.50 representing 5% to 8% EPS growth. The company attributed the slower rate of growth to two factors: higher interest costs and a higher tax rate are likely to decrease EPS growth by 2 percentage points or ($0.27/sh), and the company pointed to flat growth or the lack of a ($0.42) benefit for its large equity earnings pool, which accounts for 20% of pretax income. If operating earnings for F2027 increase by 9%-12%, as Air Products expects, the benefit