Shares of Air Products & Chemicals (NYSE:APD) were down 10% on Wednesday afternoon after the company reported earnings that fell short of expectations. The company expects issues to continue into 2021, and that is weighing on the stock today.
Prior to markets opening, Air Products reported fiscal fourth-quarter adjusted earnings of $2.19 per share on revenue of $2.32 billion. The sale number came in ahead of the $2.27 billion consensus, but the earnings were $0.02 per share below expectations.
The company said that it lost between $0.15 and $0.20 per share in earnings due to the COVID-19 pandemic because of lower merchant demand for its industrial gases and higher expenses to keep operations safe. Sales of industrial gases fell 3% in the Americas and 2% in Asia, while climbing 3% in its Europe, Middle East, and Africa region.
"Despite significant uncertainty in the global economy and ongoing challenges from COVID-19, we continue to deliver value through our stable business model, financial position, exciting growth opportunities, and the unwavering commitment and discipline of our people," company chairman and CEO Seifi Ghasemi said in a statement.
Ghasemi said he expects the challenging environment to continue into 2021, which is likely more of a concern for Wall Street than a slight earnings per share miss. Longer term, he remains bullish on the company's opportunities and in particularly the potential for hydrogen-based energy.
"Around the world, the energy transition is a focus for economic recovery, and our expertise, technology and people put Air Products at the heart of providing sustainable energy and environmental solutions," Ghasemi said.
Shares of Air Products have held up relatively well through the pandemic, up 18% for the year even after Wednesday's decline. Ghasemi could be correct about the business's long-term potential, but investors on Wednesday are more focused on the near-term uncertainty.