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Air Products and Chemicals (APD +9.88%) stock soared 9.8% through 12:35 p.m. ET Thursday after beating on sales and earnings this morning. Analysts forecast Air Products would earn $3.08 per share on $3.1 billion in sales, but the gases production company reported a fiscal Q4 profit of $3.39 per share on $3.2 billion in sales. Air Products Q4 and full-year earnings The $3.39 per share was only a non-GAAP number. Earnings as calculated according to generally accepted accounting principles (GAAP) were much lower -- just $0.02 per share -- and sales declined about 1% year over year, but investors don't seem upset. Even more surprising is investors' reaction in light of full-year results. For all of fiscal 2025, Air Products reported a 0.5% sales decline, and net losses of $1.74 per share, a stark reversal from last year's full-year profit of $17.24. And free cash flow for the year ran negative, to the tune of $3.7 billion in cash burned. Is Air Products stock a sell? Why are investors in such a forgiving mood today? Perhaps because the "one-time" items Air Products cited as weighing on its results truly were one-time in nature. Management blamed all its losses on "significant charges related to business and asset actions" -- assets that, once sold, can't be sold again. And management quickly pivoted to highlight its prospects for the year ahead. In fiscal 2026, Air Products believes it can earn $12.85 to $13.15. At $261 and change in share price, that works out to a P/E ratio of only 20 -- significantly cheaper than the average S&P 500 (^GSPC 1.18%) stock. Given the prospects for an imminent turnaround, it seems investors are willing to give Air Products the benefit of the doubt today.
