Air Products Q3 FY26: GAAP hit from project-exit charges as adjusted EPS beats guidance
- GAAP operating loss of $2.1 billion and loss per share of $6.47, driven by approximately $2.9 billion pre-tax ($2.2 billion after-tax) charges tied to project-exit decisions announced June 30, 2026.
- Non-GAAP adjusted EPS of $3.47 and adjusted operating income of $810 million; adjusted EPS rose 12% and adjusted operating income increased 9%.
- Raised full-year fiscal 2026 adjusted EPS guidance to $13.39–$13.49, Q4 guidance $3.55–$3.65, and now expects fiscal 2026 capital expenditures of approximately $3.5 billion.
- Portfolio actions include an agreement to build and operate four ASUs and new pipelines in Taiwan for a semiconductor expansion, discontinuation of the Louisiana Clean Energy Complex and Casa Grande liquid-hydrogen project, and a NEOM renewable-ammonia marketing agreement with Yara.
Quarter performance
GAAP results reflected an operating loss of $2.1 billion and loss per share of $6.47, with GAAP operating margin of negative 66.3%, driven by approximately $2.9 billion pre-tax ($2.2 billion after-tax, or $9.92 per share) charges associated with project-exit decisions announced June 30, 2026. On a non-GAAP basis, adjusted operating income was $810 million (up 9%) and adjusted EPS was $3.47 (up 12%). Third-quarter sales were $3.2 billion, up 5% on higher volumes, pricing and favorable currency.
Guidance and capital
The company raised fiscal 2026 full-year adjusted EPS guidance to $13.39–$13.49 and set fourth-quarter adjusted EPS guidance at $3.55–$3.65. Fiscal 2026 capital expenditures are now expected to be approximately $3.5 billion. Management cited contributions from new assets, pricing actions and productivity initiatives as drivers of outlook improvement while remaining cautious on macro uncertainty.
Project and commercial actions
Air Products announced it will not proceed with the Louisiana Clean Energy Complex and will discontinue the zero-carbon liquid hydrogen facility in Casa Grande, Arizona, and other smaller clean-energy distribution projects. It finalized a long-term agreement for Air Products San Fu to build, own and operate four large air separation units, bulk gas systems and new underground pipelines supporting a semiconductor expansion in Taiwan. The company also signed a marketing and distribution agreement with Yara for renewable ammonia from the NEOM Green Hydrogen Project.
Segment highlights
Americas sales were $1.3 billion (up 5%) with operating income of $395 million. Asia sales were $886 million (up 9%) with operating income of $256 million. Europe sales were $816 million (up 6%) with operating income of $231 million. Middle East and India equity affiliates' income was $101 million (up 18%), while corporate and other sales declined to $103 million with an $80 million operating loss.
Source: Air Products