Why Did Air Products Stock Pop Today?

Air Products and Chemicals (NYSE: APD) 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.

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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 (SNPINDEX: ^GSPC) stock. Given the prospects for an imminent turnaround, it seems investors are willing to give Air Products the benefit of the doubt today.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.