Why Did Praxair’s Surface Technologies Revenues Rise in 3Q16?
Surface Technologies’ revenues
Praxair’s (PX) Surface Technologies’ segment reported revenues of $150 million in 3Q16, as compared to $147 million in 3Q15, which implies a 2.0% rise on a YoY (year-over-year) basis. Surface Technologies segment represented ~5.5% of Praxair’s total revenue in 3Q16.
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Praxair’s Surface Technologies segment reported an operating profit of $26 million in 3Q16, as compared to $25 million in 3Q15, implying 4.0% YoY rise. The Surface Technologies segment operating profit margin grew 30 basis points YoY.
The Surface Technologies segment had a 3% positive impact on sales due to higher prices and volumes. Revenues rose 1% on acquisitions, and the aerospace end market was primarily responsible for higher volumes and prices. That said, foreign currency translation and lower pass-through costs impacted the segment’s revenue by -1.0% apiece.
The Surface Technologies segment’s operating profit margin rose 7.0%, primarily due to increased volumes and prices, whereas higher costs and foreign currency impacted the operating profit margin by -3.0%.
Notably, investors can indirectly hold Praxair by investing in the iShares Global Materials ETF (MXI), which had 2.0% of its portfolio in Praxair on October 28, 2016. The other top holdings of the fund include Dow Chemical (DOW), DuPont (DD), and BHP Billiton (BHP), which had weights of 3.8%, 3.8%, and 3.5%, respectively, on October 28, 2016.
In the next and final part, we’ll analyze the latest analyst recommendations on Praxair after its 3Q16 earnings.