Air Products just reported a bad quarter. Here's why Jim Cramer favors rival Linde instead
CNBC's Jim Cramer said Tuesday the industrial gas industry looks like a "winner takes all game" after drastically different quarterly performances from two leading companies in the group.
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On Tuesday, Air Products and Chemicals (APD) shares dropped over 10% after the company released weaker-than-expected earnings and revenue for its fourth quarter of fiscal 2023. "It was a very bad quarter," Cramer said, pointing to Air Product's weak forward guidance compared to rival Linde's (LIN) overall upbeat results last month.
On Oct. 26, Linde posted 17% adjusted earnings-per-share growth and a lift to its profit guidance. The stock was rewarded with an increase of more than 1.5% that day and posted gains in the next seven sessions. Shares were down about 1% on Tuesday. We'll have to see at the close whether Linde shares can turn things around and go for eight.
"The industrial gas business has historically been [about] secular growth," meaning a favorable industry tide raises all boats, Cramer said. However, he added, "Air Products is proving that not to be the case."
Cramer's Charitable Trust does not hold shares of Air Products but does have a stake in Linde.
Here's a full list of the stocks in Jim's Charitable Trust, the portfolio used by the CNBC Investing Club.