Air Products and Chemicals, Inc.

Third-quarter fiscal 2026 sales increased 5%, operating income increased 9%, operating margin was 25.6%, and EPS was $3.47, up 12% from last year. Return on capital was 11.7%, up 60 basis points year over year. Helium was a 2% headwind, better than the 3% expected. Year to date, EPS is up 14%, free cash flow is positive, dividends returned to shareholders totaled $1.2 billion, and net debt-to-EBITDA was 2.1x. Management raised full-year fiscal 2026 EPS guidance to $13.39 to $13.49, equivalent to 11% to 12% growth, and guided Q4 EPS to $3.55 to $3.65, up 5% to 8%. Fiscal 2026 capex is now expected to be about $3.5 billion, about $500 million lower than previously, mainly due to timing, lower maintenance, and canceled projects.

Eduardo Menezes emphasized execution in a volatile market, saying the quarter showed strong volume, price, and productivity progress. He said the company is focused on three priorities: earnings growth, optimizing the project portfolio, and maintaining capital discipline. He highlighted the decision to exit the Louisiana project and other clean-energy projects as a way to reduce capex and refocus on traditional industrial gas opportunities, especially in electronics.

Melissa Schaeffer said the quarter benefited from on-site volume growth, new assets coming online in Asia and the Americas, higher refinery production in the U.S., and pricing strength in Europe and the Americas. She noted higher costs from fixed cost inflation, but also said the company recognized about $75 million of headcount-reduction savings year to date. She pointed to year-to-date free cash flow positivity, $1.2 billion returned in dividends, and net debt-to-EBITDA of 2.1x, while reiterating that the fiscal 2026 capex forecast was lowered to about $3.5 billion because of payment timing, lower maintenance, and canceled projects.

Analysts pressed management on Jazan, NEOM, helium, Darrow, capex flexibility, and the company’s electronics backlog. On Jazan, management said the contribution estimate is still in the ballpark, a little lower than $1.35 per year, and that they do not expect a financial impact from the recent events. On NEOM, management repeatedly said fiscal 2027 should have no gain or loss and no material impact on either the income statement or cash flow statement, while stressing that Yara’s agreement helps eliminate volume risk but leaves price risk with Air Products. On Darrow, management said it will take time to maximize value from the equipment and ammonia loop, and buybacks remain a possible use of capital only toward the end of 2027 or early 2028.