Air Products and Chemicals, Inc. APD announced its decision to exit three U.S.-based projects as part of the review process initiated by its newly-elected board of directors and chief executive officer.

APD has terminated its agreement with World Energy for the Sustainable Aviation Fuel expansion project in California and canceled projects in Massena and Texas. The Massena project was planned to construct a 35-metric-ton-per-day facility to produce green liquid hydrogen. This decision was based on the recent regulatory developments in the region that rendered the existing hydroelectric power supply ineligible for the Clean Hydrogen Production Tax Credit. On the other hand, the carbon monoxide project in Texas was shut down due to unfavorable project economics. 

The termination should help streamline APD’s backlogs and focus its resources on driving shareholder value. 

As a result of these moves, APD expects to record a pre-tax charge of not more than $3.1 billion in the second quarter of fiscal 2025 due to contract and other project cancellation costs. These estimated costs are subject to further refinement and can differ from the actual figures to be recorded in the fiscal second quarter and beyond. Additional information, including revisions to its capital expenditures forecast for fiscal 2025, is expected during the company’s fiscal second-quarter earnings release.

Currently, APD has two major projects undergoing execution, the NEOM green hydrogen project in Saudi Arabia and the Louisiana Clean Energy Complex. While the NEOM project is expected to commence production at the end of 2026, the Louisiana Clean Energy Complex is anticipated to do so in 2028.

The APD stock has gained 36.9% in the past year against a 5.3% decline of the industry.

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APD’s Zacks Rank and Key Picks    

APD currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Basic Materials space are Ingevity Corporation NGVT, Carpenter Technology Corporation CRS and ArcelorMittal MT. While NGVT sports a Zacks Rank #1 (Strong Buy), CRS and MT carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ingevity’s current-year earnings is pegged at $2.75 per share. NGVT beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average earnings surprise being 95.4%. 

The Zacks Consensus Estimate for Carpenter Technology’s current fiscal-year earnings is pegged at $6.95 per share. CRS beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average earnings surprise being 15.7%. Its shares have soared 207.1% in the past year.

The Zacks Consensus Estimate for ArcelorMittal’s current-year earnings is pegged at $3.72 per share. MT earnings beat the Zacks Consensus Estimate in three of the trailing four quarters but missed in one, delivering an average surprise of 4.11%. 


 

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This article originally published on Zacks Investment Research (zacks.com).

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