Air Products & Chemicals Inc. (NYSE:APD)

The financial data reveals several notable trends and fluctuations over the six-year period analyzed.

Sales

Sales exhibited a declining trend from 2015 through 2017, decreasing from approximately $9.89 billion to $8.19 billion. Subsequently, there was a slight recovery in 2018 and 2019, after which sales stabilized around $8.85 billion in 2020, indicating challenges in sustaining growth or market conditions affecting revenue generation during this period.

Cost of sales

The cost of sales followed a generally decreasing pattern from 2015 to 2017, aligning with the drop in sales. Costs then increased in 2018, decreased marginally in 2019, and further declined slightly in 2020. The cost structure appears tightly managed relative to revenue fluctuations.

Gross profit

Gross profit initially rose from 2015 to 2016, then declined sharply in 2017 before increasing steadily through 2020. This pattern corresponds with the variations in sales and cost of sales, reflecting the impact of cost management and sales performance on profitability at the gross level.

Selling and administrative expenses

These expenses decreased continuously from 2015 to 2017, likely due to cost-cutting initiatives or efficiency improvements. Following this period, expenses remained relatively stable, with a slight increase in 2020, which may reflect inflationary pressures or increased operational activities.

Research and development expenses

R&D spending declined significantly from 2015 to 2017 but started increasing again from 2018 to 2020. This rebound could indicate renewed investment in innovation or product development after a period of reduced expenditure.

Other notable expenses and income items

Several one-time or irregular expenses impacted the results during the period. These include business separation costs and cost reduction actions predominantly in earlier years, goodwill and intangible asset impairment charges in 2017, and a facility closure expense in 2019. Offsetting some expenses, gains such as exchange of equity affiliate investments and company headquarters relocation income were noted in later years.

Operating income

Operating income closely mirrored gross profit trends, with a peak in 2016, a dip in 2017, and recovery through 2020. Increased operating income despite fluctuating sales suggests effective cost control and operational efficiency improvements.

Equity affiliates’ income

Income from equity affiliates showed an overall increasing trend, almost doubling from 2015 to 2020, implying improved performance of associated companies or favorable equity accounting outcomes.

Interest expense and other non-operating items

Interest expense increased gradually from 2015 to 2019 but showed a notable reduction in 2020, possibly due to debt restructuring or lower interest rates. Other non-operating income demonstrated variability, contributing positively in 2017 and 2019, buffering some operating income volatility.

Income before taxes and income tax provision

Income before taxes reflected the operating income pattern with growth after 2017. The income tax provision decreased sharply in 2017, then remained relatively stable, which might indicate tax planning strategies or changes in tax legislation affecting effective tax rates.

Income from continuing operations and net income

Income from continuing operations declined in 2017 but recovered robustly in following years. Net income showed considerable volatility with a major loss from discontinued operations in 2016 and an unusually high gain in 2017, which greatly affected net income volatility during these years. Excluding discontinued operations, net income attributable to the company displayed steady recovery and growth after 2017.

Net income attributable to noncontrolling interests and Air Products

Net income attributable to noncontrolling interests consistently represented a small negative amount relative to overall net income, implying minimal impact on consolidating entity earnings. Correspondingly, net income attributable to Air Products displayed trends similar to overall net income, confirming majority ownership control over earnings.

In summary, the data indicates a period of initial decline in sales and profitability until 2017, followed by a phase of recovery and stabilization. The company appears to have managed cost structures effectively despite fluctuating revenues and one-time charges. Improvements in equity affiliates’ income and operational efficiency contributed positively to earnings, while net income was influenced by significant discontinued operation events. Overall, the financial position demonstrates resilience with increasing profitability in later years of the period analyzed.