Praxair Reports Second-Quarter 2014 Results

Praxair, Inc. (NYSE:PX) reported second-quarter net income of $467 million and diluted earnings per share of $1.58, 5% and 6% above the prior-year quarter, respectively.

Sales in the second quarter were $3,113 million, 3% above the prior-year quarter, and up 5% excluding foreign currency. Organic sales grew 4% driven by new project start-ups, primarily in North America and Asia, and price across all operating segments. By end-market, sales growth was strongest for metals, energy and food & beverage customers. Acquisitions contributed 1% growth in the quarter.

Operating profit in the second quarter was $697 million, 5% above the prior-year quarter. Excluding negative currency translation impacts, operating profit rose 7% primarily driven by higher pricing and productivity gains. Operating profit as a percentage of sales was a strong 22.4% and EBITDA margin grew to 32.1%.*

Second-quarter cash flow from operations was $847 million and funded capital expenditures of $384 million, primarily for new production plants under long-term contracts with customers. Acquisition expenditures in the quarter were $46 million, primarily related to U.S. packaged gas businesses. The company paid dividends of $190 million and repurchased $140 million of stock, net of issuances. The after-tax return on capital and return on equity for the quarter were 12.6% and 28.3%, respectively.*

Commenting on the financial results and business outlook, Chairman and Chief Executive Officer Steve Angel said, “Praxair delivered another solid quarter with operating profit growth of 7%, outpacing sales growth of 5%, excluding currency headwinds, despite moderating growth in emerging markets. We achieved superior operating cash flow as a percentage of sales of 27% as a result of our consistent focus on high-quality growth and strong return on capital.

“Sales growth was driven by new projects in North America and Asia, as well as disciplined price execution across all of our operating segments. We grew the base business modestly in North America, Europe and Asia, but this growth was mitigated by weaker South American volumes as a result of negative industrial production in Brazil.

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