Fairfield County Business Journal Earnings report
Earnings report
Praxair Inc. recorded its first year-over-year rise in revenue since the third quarter of 2008, though North American sales remained tepid and a large refinery supply project near San Francisco has yet to start up due to a lawsuit.
Danbury-based Praxair is among the world’s largest suppliers of industrial gases. In the fourth quarter, sales were up slightly from their levels of a year ago at $2.4 billion; the company’s profit ballooned to $340 million from $200 million a year ago.
Despite the stabilization of its business in the fourth quarter, Praxair closed 2009 with sales off 17 percent to under $9 billion, but the company expects sales to rebound back to the $10 billion mark this year.
“It was a couple of strong weeks in January and I think that’s a positive sign,” said Jim Sawyer, chief financial officer of Praxair, in a conference call with investment analysts. “I wouldn’t say it’s jumping up astronomically, but it’s been fairly stable … and we have seen more inquiries for welding equipment and capital equipment, which should be a good sign for gas demand going forward.”
During the quarter, Praxair hiked prices on nitrogen and several other gases by 10 percent in the United States and Canada, and facility fees by the same amount, citing the slowdown in customer demand.
Also during the quarter, Praxair landed contracts to build and operate a gas production plant at an India Oil Corp. Ltd. refinery on the east coast of India. This month the company started up a similar facility in San Jose, Costa Rica, with the plant able to supply distributors throughout the Caribbean and in Panama.
The company has yet to start up a $250 million hydrogen production facility in Richmond, Calif., it is building for Chevron, having won the contract three years ago.
“It should have started up by now, but first Chevron ran into a lot of environmental issues,” Sawyer said. “Then more recently, they were hit by a judgment from the local judge to halt construction at the request of a very small environmental group, so consequently the construction has ceased there and we don’t expect it to start up until later in the year and then come on-stream in 2012.
“Now there’s rumors circulating that Chevron may actually shut down that refinery,” Sawyer said. “I consider that to be very unlikely that they will shut it down; if they did, we clearly get reimbursed from what we spent.”
In its second fiscal quarter ending Dec. 31, Ethan Allen Interiors Inc. sales dropped 24 percent to $143 million, and the company absorbed a $3.3 million loss in the quarter.
CEO Farooq Kathwari attributed the drop both to the economy and ongoing restructuring, as Ethan Allen consolidates stores in favor of larger design centers with new compensation schemes for workers.
“The consolidation and restructuring initiatives did result in lower delivered sales in the December quarter while increasing our backlogs,” Kathwoori said in a statement. “Our plants, retail and logistics have absorbed most of the operational changes and transition costs during the last six months. This includes the training of 274 new upholstery associates and the conversion of our case goods products to custom (manufacturing).”
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