Airgas lowers fourth quarter earnings guidance
Airgas, Inc. (NYSE: ARG) lowered earnings guidance for its fourth quarter ending March 31, 2009.
The company now expects fully diluted earnings per share to be in the range of $0.64 to $0.67 for the fourth quarter and $3.07 to $3.10 for the full year, and reiterates that prevailing economic conditions offer limited visibility into future sales and earnings, which should be taken into consideration when evaluating the Company’s guidance. The previously announced guidance was $0.73 to $0.76 per share for the fourth quarter and $3.16 to $3.19 for the full year.
The original guidance had assumed a modest decline from third quarter sales levels, yielding a low to mid single-digit percentage decline in total same-store sales. Assuming current sales trends persist, the company now expects a fourth quarter total same-store sales decline in the low teens, with hardgoods declining more significantly than gas and rent. Volumes remain low in most customer segments with manufacturing suffering the sharpest declines and medical showing the most resilience.
The broad-based pressure on sales volumes in the fourth quarter has prompted the company to implement additional cost control measures. In addition to previously announced actions expected to generate $35 million in annual expense savings and $10 million in annual operating efficiency savings, the company has instituted a salary and wage freeze to mitigate future cost pressures. It has also taken steps to realize another $10 million in annual expense savings.
“Our outstanding team of Airgas associates has responded quickly to the economic crisis, and our guidance shows we will deliver yet another record year of earnings to our shareholders,” said Airgas Chairman and CEO Peter McCausland. “During this economic slowdown, we have taken appropriate steps to protect our profitability, while remaining focused on the creation of long-term shareholder value. Our cash flow remains strong despite the challenging sales environment, and we are well-positioned to pursue our business strategy.”
