Air Products — Fiscal 2026 Earnings Summary

Financial Performance:

• Full-year fiscal 2026 sales reached $13.0 billion, an 8% increase driven by 4% higher volumes, 2% higher energy cost pass-through, and 2% favorable currency.
• Q4 fiscal 2026 sales were $3.6 billion, a 12% increase driven by 9% higher volumes, 1% higher pricing, 1% higher energy cost pass-through, and 1% favorable currency.
• GAAP operating income for fiscal 2026 was $23 million (0.2% margin) compared to an operating loss of $877 million (-7.3% margin) in the prior year; Q4 GAAP operating income was $633 million (17.8% margin) compared to $17 million (0.5% margin) in the prior year.
• Adjusted operating income for fiscal 2026 was $3.2 billion (24.4% margin), an 11% increase; Q4 adjusted operating income was $856 million (24.1% margin), a 5% increase.
• Adjusted EPS for fiscal 2026 was $13.45 (12% increase); Q4 adjusted EPS was $3.61 (6% increase).
• Cash used for investing activities was $4.1 billion, down $3.0 billion from the prior year; capital expenditures were $3.3 billion, down $1.8 billion.
• Cash provided by operating activities was $4.68 billion for fiscal 2026, compared to $3.26 billion in fiscal 2025.
• Dividends paid to shareholders were $1.6 billion for fiscal 2026.

Guidance and Future Outlook:

• Fiscal 2027 full-year adjusted EPS guidance is $14.15 to $14.50.
• Fiscal 2027 first quarter adjusted EPS guidance is $3.35 to $3.45.
• Fiscal 2027 capital expenditures are expected to range from $3.0 billion to $3.5 billion.

Business Segments and Product Lines:

• Americas segment sales increased 27% to $1.6 billion in Q4, driven by 26% higher volumes; operating income rose 20% to $469 million.
• Asia segment sales increased 4% to $909 million in Q4, driven by 3% higher volumes and 2% favorable currency; operating income rose 10% to $250 million.
• Europe segment sales increased 8% to $856 million in Q4, driven by 6% higher energy cost pass-through and 2% higher pricing; operating income rose 2% to $241 million.
• Middle East and India equity affiliates' income increased 6% to $97 million in Q4, primarily from a Saudi Arabia affiliate.
• Corporate and other sales decreased 34% to $122 million in Q4; operating loss widened to $108 million from $49 million in the prior year.
• The company expanded its backlog, including over $2.0 billion of new electronics wins.
• A significant asset sale associated with an early contract termination in the Americas contributed to Q4 volume growth.
• One of two China coal gasification plants was sold in October 2026.

Market and Competitive Landscape:

• Air Products is the leading global supplier of hydrogen and serves energy, environmental, and emerging markets.
• The company operates in approximately 50 countries.
• Management highlighted a focus on profitably growing the core industrial gases business and accelerating growth in areas of competitive strength.

Risks and Challenges:

• Fiscal 2026 results included significant charges related to project exits, primarily associated with the clean energy complex in Louisiana, the green hydrogen facility in Casa Grande, Arizona, and two China coal gasification plants.
• Q4 fiscal 2026 charges of $222.5 million related to updated estimates for the sale of the two China coal gasification plants.
• Fiscal 2026 adjusted operating margin decreased 150 basis points in Q4 primarily due to higher costs, including fixed-cost inflation and higher incentive compensation.
• Forward-looking statements note risks including project delays, scope changes, cost escalations, contract terminations, customer cancellations, geopolitical conflicts, supply chain disruptions, and regulatory changes.

Management Commentary and Tone:

• CEO Eduardo Menezes stated that fiscal 2026 results demonstrate progress in improving the core industrial gas business, strengthening execution, and allocating capital with discipline.
• Management emphasized a disciplined approach to capital allocation for fiscal 2027 while focusing on expanding the industrial gas project backlog and delivering continued operating income growth.
• Management noted that the results reflect the dedication of employees regarding safety and customer service.

Other Key Points:

• Fiscal 2026 GAAP EPS was $2.39, reflecting significant charges related to project exits, compared to a loss per share of $1.74 in the prior year.
• Non-GAAP capital expenditures for fiscal 2026 were $3.3 billion, excluding spending for the NEOM Green Hydrogen Company joint venture funded by sources other than Air Products' equity.
• The company recorded $3.2 billion in pre-tax business and asset action charges in fiscal 2026, primarily related to project exit actions announced in June 2026.
• Shareholder activism-related costs of $86.3 million were incurred in fiscal 2025 but none in fiscal 2026.
• A gain on sale of business of $67.3 million was recognized in fiscal 2025 from the sale of a Singapore subsidiary.
• A gain on sale of other assets of $31.3 million was recognized in fiscal 2025 from the sale of a regional office in England.