Airgas, No. 8 on Industrial Distribution's 2014 Big 50 List, on Friday provided a negative update on organic sales growth for its fourth quarter ending March 31, and issued a revised earnings guidance.
"Organic sales growth has been disappointing this quarter," said President and Chief Executive Officer Michael Molinini. "Organic sales year-over-year growth rates, which were 6 percent in the December quarter, have moved lower this quarter. Based on sales to date and current trends, we now expect year-over-year organic growth for our fourth quarter to be in the range of 1 percent to 2 percent, compared to growth of 6 percent to 7 percent which was assumed in our guidance.
"While we anticipated near-term sales challenges due to the uncertainty caused by the significant and rapid decline in oil prices and the impact of the strong dollar on manufacturers that export, we are experiencing greater than anticipated declines in growth rates in our Energy & Chemicals and Manufacturing customer segments. We have also been impacted by challenging weather conditions throughout much of the country. As a result of this anticipated sales shortfall, we now estimate that earnings per diluted share will be in the range of $1.13 to $1.16 as compared to our prior year's fourth quarter adjusted earnings per diluted share* of $1.15."
The company's previous fiscal 2015 fourth quarter earnings per diluted share guidance was $1.25 to $1.30.
"We are seeing an economy that is clearly weaker than it was in the December quarter, and the level of uncertainty in the marketplace makes it difficult for us to predict our near-term sales outlook," Airgas Executive Chairman Peter McCausland said. "We continue to look hard at all our operating costs and execute our productivity initiatives, and we will manage more tightly all capital expenditures until sustained growth levels return. We remain optimistic that the U.S. economy and Airgas will ultimately benefit as lower energy costs filter through the large and diverse customer base we serve, but we cannot count on strong organic growth in the near-term. We are confident that Airgas is maintaining or improving its competitive position in the industry."