Praxair Inc. Earnings: Powering Ahead

S&P 500 (NYSE:SPY) component Praxair Inc. (NYSE:PX) reported its results for the fourth quarter. Praxair produces and sells atmospheric, process and specialty gases, and high-performance surface coatings to industrial clients.

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Praxair Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the synthetics company rose to $420 million ($1.38 per share) vs. $133 million (43 cents per share) in the same quarter a year earlier. This is a more than threefold rise from the year earlier quarter.

Revenue: Rose 6.6% to $2.8 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: PX reported adjusted net income of $1.36 per share. By that measure, the company was about in line with expectations as the mean analyst estimate was $1.37 per share. Analysts were expecting revenue of $2.84 billion.

Quoting Management: Commenting on the financial results and business outlook, Chairman and Chief Executive Officer Steve Angel said, “In 2011, Praxair again delivered strong growth combined with industry-leading profitability. We signed a record amount of new contracts in 2011 and finished the year with a backlog of $2.7 billion of new projects under construction which will come on-stream in 2012, 2013, and 2014.”

Key Stats:

The company has now seen net income rise in four straight quarters. In the third quarter, net income rose 13.8% while the figure climbed 14.6% in the second quarter and 26.8% in the first quarter from the year earlier.

Gross margin shrank 0.3 percentage point to 42.8%. The contraction appeared to be driven by increased costs, which rose 7.1% from the year earlier quarter while revenue rose 6.6%.

Revenue has risen the past four quarters. Revenue increased 14.1% to $2.9 billion in the third quarter. The figure rose 13.1% in the second quarter from the year earlier and climbed 11.3% in the first quarter from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by one cent, and in the second quarter, it was ahead by one cent.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from $1.46 per share to $1.41, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At $5.44 per share, the average estimate for the fiscal year has fallen from $5.46 ninety days ago.

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

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com