Jul. 22--Air Products & Chemicals Inc., the world's largest hydrogen producer, reported fiscal third-quarter profit that rose 61 percent and said it will cut more jobs and close more plants to reduce expenses.

Net income in the three months through June climbed to $113.2 million, or 53 cents a share, from $70.1 million, or 32 cents, a year earlier, Allentown-based Air Products said today in a statement. Excluding some items, profit was $1.05 a share, topping the 98-cent average estimate of 14 analysts surveyed by Bloomberg.

Chief Executive Officer John McGlade is eliminating an additional 1,150 jobs, or 6 percent of the workforce, as the global recession trims demand for gases used to make metals, chemicals and electronics. McGlade has announced about 2,550 job cuts, or 13 percent of employees, since December. Sales tumbled 28 percent to $1.98 billion in the quarter.

"Cost cutting and sequential volume improvement in their more cyclical businesses, like electronics" helped earnings beat estimates, Laurence Alexander, a New York-based analyst at Jefferies & Co., said by telephone. He recommends buying the shares.

Air Products fell 95 cents, or 1.4 percent, to $68.75 at 9:35 a.m. in New York Stock Exchange composite trading. The shares gained 39 percent this year through yesterday.

The results show "poor earnings quality and negative pricing trends," Jeffrey J. Zekauskas, a New York-based analyst at JPMorgan Chase & Co., said in a report. He rates the shares "neutral."

Profit Forecast

Earnings in the fourth quarter will be $1.04 to $1.14 a share, excluding certain costs, Air Products said. The company was estimated to earn $1.12, the average estimate of 13 analysts in the Bloomberg survey.

Third-quarter net income was reduced by 51 cents a share, including 39 cents for employee severance, factory closings and asset writedowns, 10 cents for a customer bankruptcy and plant closings, and 2 cents for pension payments to company officers.

The latest job cuts should save $30 million next year and $50 million in fiscal 2011, Air Products said. The earlier restructuring will save $50 million this year and $125 million a year starting in fiscal 2010, said Betsy Klebe, a company spokeswoman.

The restructuring is global, and Air Products isn't detailing workforce reductions and plant closings by location or business, Klebe said. Restructuring in the electronics business may be "fairly severe" because pricing pressure has made that unit the worst performer, Alexander said.

Sales Volumes

The revenue decline in the quarter included an 11 percent drop in sales volumes from the year-earlier period and unchanged pricing, Air Products said a presentation on its Web site. Volumes rose 3 percent from the second quarter, and average prices fell 2 percent.

"While we are still seeing the impact of the global recession on our volumes, we've seen signs of improvement during this quarter in some of our end markets, particularly in electronics and Asia," McGlade said in the statement. "The actions we are taking to drive improvement in costs are positioning the company for continued margin improvement."

Operating profit fell in the three largest businesses.

Profit dropped 17 percent in the merchant business, which supplies manufacturers, and earnings declined 30 percent in the tonnage-gases unit, which serves steelmakers, oil refiners and chemical producers, the company said.

Profit tumbled 45 percent in the electronics unit, which sells gases such as nitrogen trifluoride for making semiconductors and flat-panel displays.

Earnings a year earlier were reduced by $1.09 a share for costs related to the sale of the U.S. health-care unit.

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