Air Products Reports Q3 Sales Increase but Significant Operating Loss Due to Charges

Air Products and Chemicals, Inc. reported its financial results for the third quarter and nine months ended June 30, 2025, revealing a modest increase in sales but a significant operating loss due to substantial charges related to business and asset actions. For the third quarter, the company generated sales of $3.02 billion, a 1% increase from $2.99 billion in the same period last year. Operating income rose to $790.6 million, up 7% from $737.6 million, primarily driven by gains from the sale of a business and other assets, alongside improved pricing in non-helium merchant products. However, the nine-month results showed a net loss of $364.5 million, a stark contrast to the net income of $1.91 billion reported in the prior year, largely due to a pre-tax charge of approximately $3 billion related to project exits and other actions.

The company’s financial performance was impacted by several strategic decisions, including the divestiture of its LNG business in September 2024, which contributed to lower volumes. The overall sales volume decreased by 3% for the nine-month period, while energy cost pass-through to customers increased by 2%. The operating margin for the third quarter improved to 26.2%, up from 24.7% in the previous year, reflecting the positive effects of pricing and cost improvements, despite the challenges posed by lower volumes and shareholder activism-related costs.

In terms of operational developments, Air Products completed the acquisition of Ijsfabriek Strombeek, an independent industrial gases company in Belgium, for $74.2 million, which is expected to enhance its market presence in Europe. Additionally, the company recognized a gain of $67.3 million from the sale of a subsidiary in Singapore, which had previously contributed approximately $50 million in annual sales. The company’s equity affiliates' income remained stable at $463.7 million, down slightly from $470.6 million, reflecting lower contributions from certain joint ventures.

Looking ahead, Air Products anticipates capital expenditures of approximately $5 billion for fiscal year 2025, focusing on clean energy projects, including the NEOM Green Hydrogen Project in Saudi Arabia. The company expects to fund these investments through its current cash balance and cash generated from operations. Despite the challenges faced in the current fiscal year, management remains optimistic about future growth opportunities, particularly in the clean energy sector, and is committed to enhancing shareholder value through strategic investments and operational efficiencies.