Praxair, Inc. (NYSE: PX) reported third-quarter net income and diluted earnings per share of $430 million and $1.43, respectively. These results include an income tax benefit, cost reduction charges taken primarily in Europe, and a pension settlement charge. Excluding these items, adjusted net income and diluted earnings per share were $419 million and $1.39, 2% and 1% below the prior-year quarter, respectively.*
Sales in the third quarter were $2,774 million, 4% below the prior-year quarter. Sales growth was 4%, excluding negative foreign currency translation and cost pass-through effects. Underlying sales grew in all geographic segments except Europe. North American sales growth reflects higher price and solid demand from the manufacturing, energy and metals markets. Sales growth in Asia reflects new plant start-ups for chemicals and metals customers partially offset by reduced shipments to the electronics and photovoltaic industries. Europe and South America sales were negatively impacted by weak macro-economic conditions and significant foreign currency headwinds.
Reported operating profit in the third quarter was $558 million. Adjusted operating profit of $623 million was 1% below the prior-year quarter of $632 million. Excluding currency effects, operating profit grew 7% from price, productivity gains and acquisitions. Adjusted operating margin as a percentage of sales was 22.5%.*
Third-quarter cash flow from operations was a record $746 million and capital expenditures were $547 million, primarily for new production plants under long-term contracts with customers. The backlog of new projects under construction for on-site customers was $2.6 billion with new project signings during the quarter in China and Brazil. The company paid dividends of $164 million and repurchased $106 million of stock, net of issuances. The debt-to-capital ratio was 51.6% and debt-to-EBITDA was 1.9x.* The after-tax return-on-capital and return on equity were 14.2% and 29.2%, respectively.*
Commenting on the financial results and business outlook, chairman, president and chief executive officer Steve Angel said, “Praxair’s relentless focus on operational excellence, project execution and financial discipline will continue to deliver increasing cash flow and earnings per share for our shareholders.