Airgas Inc. Earnings Cheat Sheet: Five Straight Quarters of Double-Digit Growth

S&P 500 (NYSE:SPY) component Airgas Inc. (NYSE:ARG) reported its results for the second quarter. Airgas, through its subsidiaries, distributes industrial, medical, and specialty gases and hardgoods in the United States. It offers a range of gases, including nitrogen and helium, as well as welding and fuel gases.

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Airgas Earnings Cheat Sheet for the Second Quarter

Results: Net income for Airgas Inc. rose to $77.7 million ($1.01 per share) vs. $66.6 million (78 cents per share) in the same quarter a year earlier. This marks a rise of 16.7% from the year earlier quarter.

Revenue: Rose 11.8% to $1.19 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: ARG reported adjusted net income of $1.03 per share. By that measure, the company was about in line with expectations as the mean analyst estimate was $1.02 per share. Analysts were expecting revenue of $1.17 billion.

Quoting Management: “We continue to see strength in the manufacturing-intensive regions of the U.S. and in our petrochemical and energy customers,” said Airgas Chief Executive Officer Peter McCausland. “The relative outperformance in our hardgoods business on the strength of sales to large manufacturing customers and the mix shift within hardgoods to welding and automation equipment had a dilutive effect on our gross margin, but are generally indicative of sustained activity levels in the manufacturing economy. While this is cause for optimism, given the global economic uncertainty that unfolded during the quarter, we are paying close attention to our business trends and have proven in the past that we can quickly adjust our cost structure if warranted.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 15.5% and in the fourth quarter of the last fiscal year, the figure rose 56.1%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the first quarter, by 3 cents in the fourth quarter of the last fiscal year, and by one cent in the third quarter of the last fiscal year.

Gross margin shrank 1.7 percentage points to 53.5%. The contraction appeared to be driven by increased costs, which rose 16% from the year earlier quarter while revenue rose 11.8%.

Revenue has risen the past four quarters. Revenue increased 10.6% to $1.16 billion in the first quarter. The figure rose 12.5% in the fourth quarter of the last fiscal year from the year earlier and climbed 9.8% in the third quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Expectations for the company’s next quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the third quarter has risen to 96 cents per share from 94 cents. For the fiscal year, the average estimate has moved up from $3.91 a share to $3.98 over the last ninety days.

Competitors to Watch: Air Products & Chemicals, Inc. (NYSE:APD), Praxair, Inc. (NYSE:PX), and Rentech, Inc. (AMEX:RTK).

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(Source: Xignite Financials)