Air Products & Chemicals Inc. APD is set to release second-quarter fiscal 2016 results ahead of the bell on Apr 28.Last quarter, the industrial gases giant delivered a positive earnings surprise of 4.71%. Air Products has outperformed the Zacks Consensus Estimate in the trailing four quarters with an average beat of 2.73%. Let’s see how things are shaping up for this announcement.Factors to Consider Air Products surpassed earnings expectations in first-quarter fiscal 2016 (ended Dec 31, 2015) and saw higher profits, backed by its cost-management initiatives and improved pricing. Air Products expects earnings from continuing operations for second-quarter fiscal 2016 to be in the range of $1.78–$1.83 per share, up 15%–18% from the prior-year quarter. The company reiterated its earnings guidance for fiscal 2016 in the band of $7.25–$7.50 per share. Air Products is gaining from a diverse customer base, cost-reduction measures and sustained pricing power. New business deals and strategic investments are expected to support results in fiscal 2016. The company has a strong project backlog. These projects are expected to be accretive to earnings and cash flow as they come on stream over the next few years. Acquisitions and new business wins are expected to continue driving results. The acquisition of a 67% stake in Chilean industrial gas company, Indura S.A. has ushered in substantial growth opportunity for Air Products, positioning it as Latin America’s second-largest industrial gas producer. The acquisition opened up a $1.5 billion opportunity in Latin America, the second-highest growth region in the world, following Asia. Moreover, the acquisition of EPCO is an excellent fit for Air Products and will help expand its market share by offering an extended product portfolio to existing and new customers. It will also provide cost and revenue synergies to Air Products. Air Products is also embarking on headcount reduction, keeping a tight control on SG&A expenses and undertaking work process improvement initiatives. The company is making good progress with its $600 million cost-cutting program and has already achieved cost savings of $300 million. However, sluggish global economic conditions may continue to impact the demand for the company’s products. Challenging conditions in Europe are expected to keep industrial gases volumes under pressure in the region. Air Products' industrial gases business in the Europe, Middle East, and Africa (EMEA) region is seeing pressure from a weak operating environment. Moreover, Air Products remains exposed to unfavorable currency impact stemming from weakening of most currencies against the U.S. dollar. The company saw an 8 cents per share earnings headwind associated with unfavorable currency swings in the last reported quarter. Air Products is expected to continue to see currency headwinds in the second quarter. Air Products, in Sep 2015, announced plans to separate its Materials Technologies unit through a tax-free spin-off (expected to be completed before Sep 2016). Following the spin-off, both Air Products and the Materials Technologies businesses will operate as two best-in-class public companies with separate business models The spin-off will enable Air Products to become the safest and most profitable industrial gas company in the world, providing outstanding service to its customers. Also, it will allow the company to focus entirely on specialty materials. Air Products, earlier this month, also said that it will exit its Energy-from-Waste (EfW) business to focus on its core industrial gases business. The company will record a pre-tax charge in the band of $900 million to $1 billion in the to-be-reported quarter, mainly to write down assets related to the EfW business. The company will provide more color on the financial impacts of leaving the EfW business in its fiscal second-quarter earnings release. Earnings Whispers Our proven model shows that Air Products is likely to beat earnings this quarter because it has the right combination of two key ingredients. Zacks ESP: Earnings ESP for Air Products is +0.56%. This is because the Most Accurate Estimate stands at $1.81, while the Zacks Consensus Estimate is pegged at $1.80. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. Zacks Rank: Air Products carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement. Stocks that Warrant a Look Here are some companies in the basic materials sector you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter: Agnico Eagle Mines Limited AEM has an Earnings ESP of +50% and a Zacks Rank #3 (Hold).Albemarle Corporation ALB has an Earnings ESP of +1.18% and a Zacks Rank #3.Ashland Inc. ASH has an Earnings ESP of +1.74% and a Zacks Rank #3.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AIR PRODS & CHE (APD): Free Stock Analysis Report ASHLAND INC (ASH): Free Stock Analysis Report ALBEMARLE CORP (ALB): Free Stock Analysis Report AGNICO EAGLE (AEM): Free Stock Analysis Report To read this article on Zacks.com click here. 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