Praxair Inc., the biggest U.S. producer of industrial gases such as hydrogen, cut its first-quarter earnings forecast by 8 cents a share after Venezuela devalued its currency.
Net income will now be $1.27 to $1.32 a share, Danbury, Connecticut-based Praxair said today in a statement. It projected $1.35 to $1.40 in January. Net income was expected to be $1.41, according to the average of seven analysts’ estimates compiled by Bloomberg.
Venezuela last month weakened the exchange rate by 32 percent to 6.3 bolivars per dollar, the fifth devaluation in nine years. A spending spree that almost tripled the fiscal deficit last year helped ailing President Hugo Chavez, 58, win a third six-year term. The devaluation can help narrow the budget deficit by increasing the amount of bolivars the government receives from oil exports.
The 8-cent-a-share expense is “due primarily to the remeasurement of the local Venezuelan balance sheet to reflect the new official exchange rate,” Praxair said in its annual filing. Praxair has less than 1 percent of sales and net assets in Venezuela, the company said.
Praxair Chairman and Chief Executive Officer Stephen Angel is expanding into beverage carbonation services for restaurants with its $1.1 billion purchase of NuCO2 Inc., a deal that the company said closed today.