Air Products, a rock-solid dividend growth stock, reported a fiscal first-quarter miss and slashed its full-year earnings guidance on Asia weakness, particularly in China. As a result, APD stock took a major hit, diving to a new 52-week low and becoming Monday’s worst performer on the S&P 500. This came about due to a slowdown in manufacturing in Asia and lower helium demand, primarily in China, which accounts for 15% of Air Products’ revenue. Despite the weaker Q1 results and continued softness in Asia, the revised earnings guidance still implies a 6%-9% year-over-year earnings growth, giving Air Products room to continue growing its payouts to shareholders. Moreover, in January, the company increased its quarterly dividend to $1.77 per share, marking the 42nd consecutive year of dividend increases.
The industrial giant’s shares plunged 15% to 219.41 in significant volume on Monday, falling as low as 217.03, the lowest level since March 2022. Air Products’ stock yields 3.19% after its latest dividend hike. Meanwhile, for the larger multi-industry companies, guidance has generally been in-line to a bit softer this earnings season, with economic growth in China emerging as a key concern for many. It should be noted that APD’s stock pullback occurred as the indexes modestly retreated from record highs due to a spike in rates. Industrial bellwether General Electric also managed to hit a fresh six-year best, while Johnson Controls, hampered by China weakness, was the lone underperformer among the industrial companies flagged in the report. This suggests that the Asia slowdown is not only impacting Air Products but also other major players in the industry.