Praxair Inc. Wednesday, July 25, announced record second-quarter sales and earnings. Net income grew 18 percent to $291 million, and diluted earnings per share grew 19 percent to 89 cents. Sales in the second quarter increased to $2,332 million, 12 percent above the prior-year quarter.
Sales growth was led by significant new business in the energy sector and new business in Asia and South America. Second-quarter operating profit grew 15 percent to $439 million as a result of new business, combined with operating leverage from more favorable pricing and cost productivity.
In North America, second-quarter sales reached $1,293 million, 12 percent above the prior-year quarter. Sales growth came primarily from higher sales to energy and general manufacturing markets, followed by electronics, healthcare and food and beverage. Operating profit in the quarter grew to $231 million from $215 million in the second quarter of 2006. This represented 16 percent growth versus the prior year, excluding a $15-million benefit from insurance recoveries in the 2006 period.
Praxair Surface Technologies’ sales in the quarter grew to $131 million, up 12 percent from the prior-year quarter, excluding the effects of a business divestiture and currency. Sales growth came primarily from higher sales of OEM aviation coatings and industrial coatings for the power turbine market. Operating profit increased sharply to $23 million from $16 million in the 2006 quarter. The operating margin improved to 17.6 percent from 12.6 percent, primarily from higher sales and higher pricing.
“I am pleased that our growth initiatives are continuing to gain traction with our customers,” said Steve Angel, Praxair chairman and chief executive officer. “The outlook for our products and technologies continues to brighten, particularly in the energy sector and in emerging markets. In addition, our operating team is continuing to refine our production and delivery systems to improve quality for our customers while generating productivity improvements, which reduce both capital and operating costs. As a result of new project commitments from customers, we are increasing our forecast for capital expenditures. Simultaneously, we are announcing a new stock repurchase program, which we expect to fund largely out of operating cash flow.”
Praxair, based in Danbury, Conn., is the largest industrial gases company in North and South America, and one of the largest worldwide, with 2006 sales of $8.3 billion. The company produces, sells and distributes atmospheric and process gases, and high-performance surface coatings.