Today's presentation materials are available on our website at praxair.com in the Investors section. Please read the forward-looking statement disclosure on Page 2 of the slides and note that it applies to all statements made during this teleconference.In addition, please note that sequential comparisons include an adjustment in the fourth quarter of 2011 and the reconciliation to the U.S. GAAP reported numbers are in the appendix to this presentation and the press release. Jim and I will now review Praxair's first quarter results and outlook. We'll then be available to answer questions. James S. Sawyer Thank you, Kelcey, and good morning, everyone. Praxair turned in another solid quarter, with EPS growth of 7% year-on-year despite currency headwinds and weakening economic conditions in several markets. Our North American segment, Canada, the United States, and Mexico, turned in a stellar performance with operating profit growth of 16%, fueled by improving manufacturing conditions and strong operating leverage as volumes rebounded. In Europe, we experienced lower volumes and negative operating leverage particularly due to the financial crisis affecting Spain and Italy. In South America, operating profit was negatively impacted as currency devaluation, a recession in Brazil and production distribution dislocations in our operations all occurred at the same time. In Asia, a strong performance in industrial gases with much of our production capacity sold-out was partially offset by bond [ph] volumes and prices of product sold to the electronics and solar markets. Fully diluted earnings per share were $1.38. Earnings included about $10 million of other income attributable to the net effect of gains on asset sales and the recognition of income from a legal settlement, partially offset by some restructuring and severance costs. Excluding the onetime items, the underlying run rate of EPS is closer to $1.36. For the second quarter, we're expecting a continuation of the same business trends and are issuing earnings guidance of $1.40 to $1.45. For the full year, our earnings guidance is $5.75 to $5.90, increasing the bottom end of the range by $0.05. We do expect a stronger second half of 2012 as the Brazil economy gets back on track to a 4% annualized GDP growth rate and as the electronics sector picks up in the fall.
Our long-term growth plans remains strong and we're maintaining our capital spending forecast of $2.1 billion to $2.4 billion against the backlog of $2.7 billion of projects under construction with committed customer contracts. As these projects start up over the next 2 to 3 years, the contributions to sales and earnings growth should accelerate. At the same time, we are in negotiation on a record amount of new contracts, mostly on the emerging markets which should extend our growth horizons significantly. The production of cleaner energy is the largest growth driver in our portfolio. Within the next 18 months, we'll start up 3 world-scale steam methane reformers, which will increase our hydrogen production capacity by 35%. Additionally, our backlog of projects in China where we're currently sold out, should increase our sales there by more than 40%. And now, I'll let Kelcey explain in more detail, our first quarter results.Kelcey E. Hoyt Thanks, Jim. Now please turn to Slide 3 for our consolidated first quarter results. Praxair's first quarter results reflect solid growth and continuing operating leverage, with sales growth of 5%, operating profit growth of 6% and EPS growth of 7%. Consolidated sales in the first quarter were $2.8 billion, up 5% versus the prior-year quarter. Foreign currency translation negatively impacted sales 2%, as foreign currencies weakened against the U.S. dollar from the prior-year quarter. The most significant impact to sales came from the Brazilian real, Mexican peso and euro. Underlying sales grew 8% excluding currency and the impact of cost pass-through from lower natural gas prices pass through to hydrogen customers. Higher volumes contributed 4% growth and price contributed 2%. Underlying sales grew in all geographic segments with the exception of Europe. Growth was strongest in North America, driven by strong sales to metals, energy and manufacturing markets. Sales growth continued in South America and Asia from new projects and higher volumes from applications for industrial gases. In Europe, sales were higher than the prior year due to the consolidation of our industrial gas business in Scandinavia. Excluding this acquisition and negative currency effects, sales in Europe were below prior year due to the weak economic environment, particularly in southern Europe. Read the rest of this transcript for free on seekingalpha.com