Praxair Sales Up Slightly in Fourth Quarter

Industrial gases distributor Praxair, Inc. (NYSE: PX), Danbury, CT, reported fourth-quarter sales of $2.41 billion, up slightly from fourth quarter 2008 sales of $2.4 billion. Profit increased 70% to $340 million, largely due to a cost reduction program charge in the prior year quarter. Excluding this charge, profit increased 8%.

For the full year of 2009, sales were $8.96 billion, down 17% from 2008. Profit increased 3.6% to $1.25 billion.

Commenting on the results and business outlook, Chairman and Chief Executive Officer Steve Angel said, "So far, the rate of recovery from the recession has been mixed. Our businesses in Asia and South America are showing strong improvement. However, in North America and Europe our volumes are still sluggish in manufacturing, metal fabrication and non-residential construction markets," CEO Steve Angel said. "For 2010, we are cautiously optimistic that growth in the U.S. and Europe will continue to improve, but we expect the climb to be slow and deliberate."

In North America, fourth-quarter sales were $1.18 billion. Excluding the negative effect of cost pass-through, primarily from lower natural gas prices, sales were 7% below the prior year largely attributable to lower sales to chemicals, manufacturing, and energy markets. Operating profit of $261 million was 2% below the prior year due to significantly lower fixed costs.

In Europe, fourth-quarter sales were $351 million. Excluding positive currency effects, sales were slightly below the prior year due to lower volumes. Operating profit was $76 million in the quarter, compared to $83 million in the prior year due to lower volumes and currency effects.

In South America, fourth-quarter sales were $461 million. Excluding currency effects, sales were 4% below the prior-year quarter due to lower volumes, partially offset by higher pricing. Operating profit was $111 million, 28% above the prior-year period due to currency effects and higher pricing.

Sales in Asia grew to $274 million in the quarter. Excluding currency translation and cost pass-through effects, underlying sales grew 24% from the prior year. Sales growth in the region was primarily driven by higher on-site volumes in China, India and Korea to metals, chemicals, electronics and manufacturing customers and new plant start-ups. Operating profit was $42 million, 24% above the prior-year quarter and 14% higher sequentially.

Praxair Surface Technologies had fourth-quarter sales of $141 million compared to $135 million in the prior-year quarter. Sales growth was attributable to an acquisition, partially offset by currency effects and lower base-business volumes. Sequentially, sales increased $6 million primarily from higher jet engine and industrial coatings volumes. Operating profit increased to $22 million in the quarter versus $20 million in the prior-year period and $18 million in the third quarter.