Air Products to Report Fourth-Quarter Results; Shares Rise as Investors Demand Changes

— Jeff Ward, Lehigh Valley News Briefs

Air Products will report fourth-quarter earnings before the market opens on Nov. 7, and follow up with a conference call at 8:30 a.m. that day.

See details from the company.

Zacks, the investment research company, projects fourth-quarter earnings per share of $3.47 on revenue of $3.19 billion, but what’s been driving interest at the industrial-gas company has been the attention Air Products has drawn from two activist investors.

D.E. Shaw Group says the company needs a succession plan — Chief Executive Seifi Ghasemi is 80 — some new board members and a change in strategy. Mantle Ridge, another activist investor, reportedly has a $1 billion or more stake in the company, according to the Wall Street Journal, and also wants changes.

D.E. Shaw specifically said capital expenditures should be limited. Air Products has been touting billions of dollars in investments in new plants, D.E. while Shaw says the company suffers from “longstanding underperformance.”

The investment firms appear to have doubts about the company’s big spending on “green hydrogen” — the term used when the gas is produced without creating carbon dioxide emissions. Carbon dioxide is a greenhouse gas that has been linked to global warming.

Ghasemi contends that the U.S. Inflation Reduction Act, which subsidizes green hydrogen, and regulations in Europe and elsewhere will boost demand for the environmentally friendly fuel. The CEO — he is also chairman and president — has said hydrogen can replace fossil fuels in heavy industry and transport.

When the world does move toward green hydrogen, Ghasemi says Air Products will be ready to supply it and lead the move toward a clean-energy economy.

The stock has jumped on reports of activist interest. At the close today (Oct. 16), the share price was $326.78, near its 52-week high.

Upper Macungie Township-based Air Products is one of three Lehigh Valley companies with shares traded on the New York Stock Exchange. The others are PPL (NYSE:PPL) and Shift4 Payments (NYSE:FOUR).

As of 4 p.m. on Oct. 16, the market capitalization of Air Products is $72.7 billion.

–Disclosure: I own shares in Air Products as part of a buy-and-hold strategy. I do not day-trade or invest in derivatives.