Air Products & Chemicals Inc. (APD)’s new chief executive officer said the industrial gases producer, targeted by activist investor Bill Ackman, needs to change its corporate culture and make better investment decisions.
Air Products will focus on projects that generate more cash flow and on improving returns on invested capital, Seifi Ghasemi said today on an earnings conference call, his first public comments since joining the company July 1.
Ghasemi said workers need a greater sense of urgency. He plans to decentralize the Allentown, Pennsylvania-based company’s decision-making to improve its entrepreneurial capabilities. The stock rose to its highest since at least 1980.
“Simplicity, speed of execution and empowerment are some of the issues we will address,” he said.
Ghasemi, 69, was hired from Rockwood Holdings Inc. after Ackman’s Pershing Square Capital Management LP demanded changes at Air Products, which was underperforming competitor Praxair Inc. (PX) The CEO said today that Air Products can retake its position as industry leader with a strategy that he’ll describe in greater detail in mid-September.
Rockwood sold assets while Ghasemi was in charge and on July 15, less than a month after his departure, announced it would be acquired by Albemarle Corp. No asset sales at Air Products are imminent, he said today.
“Nothing is for sale right now,” Ghasemi said. “It would be premature to take action before you get these businesses performing to the best of their ability.”
Air Products said today that earnings from continuing operations were $1.46 in the fiscal third quarter. That exceeded the $1.45 average estimate of 19 analysts in a Bloomberg survey.
The shares rose 3.2 percent to $134.48 as of 12:59 p.m. in New York. They earlier climbed to $135.51, the highest since at least July 1980, according to data compiled by Bloomberg.
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