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Lincoln Electric Didn’t Impress, Met Q2 2018 Earnings Estimate

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Lincoln Electric’s second-quarter earnings

Lincoln Electric Holdings (LECO) announced its second-quarter earnings on July 23 before the markets opened. The company reported an adjusted EPS of $1.22 in the second quarter, which met analysts’ adjusted EPS estimate. During the quarter, Lincoln Electrical Holdings’ adjusted EPS rose 26% YoY (year-over-year) from $0.97 in the second quarter of 2017.

On July 23, Lincoln Electric Holdings stock opened at $91.35—down 1% from its close of $92.28 on July 22. The stock fell to $88.25 but rose to $90.74. The stock’s 52-week high was $101.34, while its 52-week low was $81.48. The markets expected the company to beat analysts’ expectations. Lincoln Electric Holdings disappointed investors by just meeting the earnings estimate.

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Second-quarter revenues

Lincoln Electric Holdings’ second-quarter revenues were $790.1 million, which just missed analysts’ estimate. The company’s revenues rose 26% YoY from $626.8 million in the second quarter of 2017. The revenues rose due to a 16.0% addition from acquisitions, a price increase of 4.9%, volume growth of 4.4%, and the positive impact of foreign exchange translation.

The company’s second-quarter operating income was $94.6 million—up 10.5% YoY from $85.6 million in the same period in 2017. On an adjusted basis, the operating income grew 18.8% YoY to $107.0 million from $90.1 million in the second quarter of 2017. The adjusted operating margin was 13.2% in the quarter—down from 14.3% in the same period in 2017. The decline in the adjusted operating margin was due to the unfavorable impact of the Air Liquide Welding acquisition.

Christopher Mapes, Lincoln Electric Holdings’ chairman, president, and CEO, said, “Our second quarter results demonstrate solid execution of our core initiatives focused on organic growth and rapid integration of our European welding business. We are well-positioned in this portion of the cycle and we will continue to focus on mitigating inflation, richening our portfolio of solutions.”

Upcoming second-quarter results

Lincoln Electric Holdings was among the major industrial (IYJ) companies that reported their second-quarter earnings today. Trinity Industries (TRN) is scheduled to report its second-quarter earnings on July 25. Ingersol Rand (IR) and Boeing (BA) are scheduled to announce their second-quarter earnings on the same day. Cummins (CMI) is scheduled to report its second-quarter earnings on July 31.

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