Air Products and Chemicals (APD) Q3 2026 earnings summary

Executive summary

• Q3 2026 sales increased 5% year-over-year to $3.2 billion, driven by higher volumes, pricing, and favorable currency impacts.

• Adjusted operating income rose 9% to $810 million, and adjusted EPS increased 12% to $3.47, exceeding guidance, with strong contributions from Asia and the Americas.

• GAAP results reflect a $2.9 billion pre-tax charge for project exits, resulting in a $2.1 billion operating loss and a net loss of $1.4 billion.

• Announced exit from the Louisiana and Casa Grande projects, optimizing the project portfolio and focusing on redeploying or selling associated assets.

• Finalized a marketing and distribution agreement with Yara for renewable ammonia from the NEOM Green Hydrogen Project and announced a long-term electronics growth agreement in Taiwan.

Financial highlights

• Adjusted operating margin improved 110 basis points year-over-year to 25.6%.

• Equity affiliates' income rose 22% in Q3 2026 to $205 million, mainly from Americas and Middle East/India segments.

• Cash provided by operating activities for the first nine months was $3.3 billion, up from $2.0 billion in the prior year.

• Capital expenditures for the first nine months were $2.6 billion, focused on clean energy projects.

• Interest expense decreased 20% year-over-year in Q3 2026 due to higher capitalized interest.

Outlook and guidance

• Raised full-year fiscal 2026 adjusted EPS guidance to $13.39–$13.49, representing 11%-12% growth; Q4 adjusted EPS expected at $3.55–$3.65.

• Fiscal 2026 capital expenditures projected at approximately $3.5 billion, down from prior year.

• Dividend payments projected to total $1.6 billion in 2026, marking the 44th consecutive year of increases.

• Cautious outlook due to macroeconomic uncertainty, but expects benefits from new assets, pricing, and productivity initiatives.