Air Products and Chemicals, Inc. APD surpassed earnings expectations in second-quarter fiscal 2016 (ended Mar 31, 2016), backed by its restructuring and self-help actions. However, its sales fell year over year and lagged expectations.The industrial gases giant logged second-quarter adjusted earnings of $1.82 per share, up 17% from $1.56 per share recorded in the year-ago quarter. Earnings also beat the Zacks Consensus Estimate of $1.80, providing a positive surprise of 1.11%. Adjusted earnings exclude charges associated with business separation, business restructuring and pension settlement expenses. Net income from continuing operations, as reported, was up 30% year over year to $379.8 million or $1.74 per share. The bottom line was supported by lower costs. Cost of sales for the reported quarter declined roughly 11% year over year to around $1.5 billion. Selling & administrative, and R&D expenses also fell year over year.Revenues declined roughly 6% year over year to $2,271.2 million in the reported quarter and missed the Zacks Consensus Estimate of $2,330 million. The top line was hurt by currency headwinds and lower energy pass-through of 3% each, as volumes and price remained consistent with the prior-year quarter.Air Products and Chemicals Inc. (APD) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany Segmental HighlightsRevenues from the Industrial Gases – America segment went down 10% year over year to $798 million in the reported quarter, hurt by lower energy pass-through of 6% and unfavorable currency impact. Lower demand in Latin America and weaker North American steel and oilfield services markets reduced volumes by 2%. Prices rose 1%.Sales from the Industrial Gases – Europe, Middle East, and Africa (“EMEA”) segment fell 6% year over year to $420 million due to unfavorable currency impact and lower energy pass-through. Underlying sales were up by 1% as lower volumes of 1% were counter-balanced by higher pricing of 2%.Sales from the Industrial Gases – Asia segment rose 3% year over year to $406 million on the back of a 10% increase in volumes, mainly from new plants and strong businesses. Unfavorable currency translation hurt sales by 6% and pricing dipped 1%.Revenues from the Materials Technologies segment declined 7% year over year to $494 million, hit by 6% lower volumes. Sales of Electronics Materials fell 10% on lower delivery system volumes. Performance Materials’ sales dropped 5% year over year due to lower volumes and reduced pricing.The Energy from-Waste (EfW) segment of the company was discontinued. To write down the assets to their estimated net realizable value, a pre-tax loss of $946 million was recorded in the reported quarter.Financial PositionAir Products ended the second quarter with cash and cash equivalents of $313.1 million, up roughly 51.7% year over year. Total long-term debt fell around 9.5% year over year to $3,573.2 million. Operating cash flow for the reported quarter rose 10.2% year over year to $1,087.5 million.OutlookAir Products expects earnings from continuing operations for third-quarter fiscal 2016 to be in the range of $1.87–$1.92 per share, up 13%−16% from the prior-year quarter. The company also raised its earnings guidance for fiscal 2016 to the band of $7.40–$7.55 per share from the earlier view of $7.25–$7.50.Air Products lowered its estimated capital expenditures for fiscal 2016 to around $1.2 billion from the previously stated $1.3 billion.Air Products, in Sep 2015, announced plans to separate its Materials Technologies unit through a tax-free spin-off.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.Zacks RankAir Products currently carries a Zacks Rank #2 (Buy).Some other favorably ranked companies in the chemical space include Akzo Nobel N.V. AKZOY, Arkema S.A. ARKAY and Koninklijke DSM N.V. RDSMY, all sporting a Zacks Rank #1 (Strong Buy).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 ARKEMA-ADR (ARKAY): Free Stock Analysis Report KONINKLIJKE DSM (RDSMY): Free Stock Analysis Report AKZO NOBEL NV (AKZOY): Free Stock Analysis Report To read this article on Zacks.com click here.