Air Products and Chemicals (APD) Q1 2026 earnings summary

Executive summary

• Adjusted EPS rose 10% year-over-year to $3.16, with adjusted operating income up 12% and sales up 6% to $3.1B, driven by higher energy cost pass-through, favorable currency, and improved pricing, despite flat volumes and helium headwinds.

• Operating margin improved to 24.4%, and return on capital was 11%, with GAAP EPS at $3.04 and GAAP operating income up 14%.

• Full-year adjusted EPS guidance maintained at $12.85–$13.15, with 7%-9% growth at the midpoint, and Q2 EPS expected at $2.95–$3.10.

• Strategic focus on price, productivity, disciplined capital deployment, and advancing clean energy projects, including major negotiations with Yara and progress on the NEOM Green Hydrogen Complex.

• Dividend increased for the 44th consecutive year, with $0.4B returned to shareholders in Q1.

Financial highlights

• Adjusted operating income rose 12% to $0.8B, with margin up 140 bps to 24.4%; GAAP operating margin up 170 bps to 23.7%.

• Net income attributable to shareholders was $678.2M, up from $617.4M year-over-year.

• Cash provided by operating activities was $900.7M, with capital expenditures of $910.7M, mainly for clean energy projects.

• Sales growth driven by energy pass-through (+3%), currency (+2%), and price (+1%), with volume flat.

• Equity affiliates' income rose 14% to $172.2M, mainly from the Americas and Europe.

Outlook and guidance

• FY26 adjusted EPS guidance set at $12.85–$13.15, up 7–9% year-over-year; Q2 EPS expected at $2.95–$3.10, up 10–15% year-over-year.

• FY26 capital expenditures projected at ~$4.0B, down ~$1B from prior year, with $1B dedicated to traditional industrial gas projects.

• New asset contributions expected in the second half; minimal market growth assumed due to macro headwinds.

• Continued investment in energy transition and core business projects, funded by existing cash and operating cash flows.