We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Lincoln Electric (LECO) Q2 Earnings Beat, Revenues Rise Y/Y
Read MoreHide Full Article
Lincoln Electric Holdings, Inc. (LECO - Free Report) reported record adjusted earnings of $2.44 per share in the second quarter of 2023, beating the Zacks Consensus Estimate of $2.32. The bottom line increased 12% year over year.
Including one-time items, the bottom line was a record $2.36 per share compared with $2.18 in the prior-year quarter.
Total revenues rose 9.4% year over year to a record $1,061 million. However, the top line missed the Zacks Consensus Estimate of $1,099 million. The improvement in revenues can be attributed to 4.5% growth in organic sales and 5.2% benefits from acquisitions. These gains were partly offset by unfavorable foreign currency exchange of 0.2%.
Our model predicted organic sales growth of 7.7% and 5.1% benefits from acquisitions. We expected headwinds from currency exchange to be 0.4%.
Costs and Margins
The cost of goods sold rose 8% to $687 million from the prior-year quarter. The gross profit increased 12% to $373 million. The gross margin was 35.2% compared with the year-ago quarter’s 34.4%.
Selling, general and administrative expenses increased 15.6% year over year to $193 million. Adjusted operating profit increased 9.5% to $184 million in the quarter. The adjusted operating margin was 17.3% in the reported quarter, flat year over year.
Lincoln Electric Holdings, Inc. Price, Consensus and EPS Surprise
Americas Welding: The segment’s total sales increased to $708 million from $625 million in the year-earlier quarter. The reported figure lagged our estimated revenues of $740 million. Adjusted operating income totaled $140 million compared with $118 million in the prior-year quarter. We estimated an adjusted operating income of $149 million.
International Welding: This segment’s revenues rose 6.5% year over year to $262 million in the reported quarter. We projected quarterly revenues of $260 million. The segment reported an adjusted operating profit of $34 million compared with the year-ago quarter’s $35 million. The reported figure surpassed our estimate of $33 million.
The Harris Products Group: The segment’s second-quarter total sales amounted to around $133 million, reflecting a year-over-year dip of 5%. The figure came below our projection of $138 million. Adjusted operating profit was $20 million compared with the prior-year quarter’s $18 million. Our prediction for the segment’s adjusted income was $19 million.
Financial Update
Lincoln Electric had cash and cash equivalents of around $220 million at the end of the second quarter of 2023 compared with $152 million at the second-quarter 2022 end. The company generated a record $199 million in cash flow from operations in the quarter under review, up 102% year over year. LECO returned $90 million to shareholders via dividends and share repurchases throughout the quarter.
Price Performance
Lincoln Electric’s shares have gained 44.8% in the past year compared with the industry’s growth of 17.6%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Lincoln Electric currently has a Zacks Rank #2 (Buy).
Worthington Industries has an average trailing four-quarter earnings surprise of 14.9%. The Zacks Consensus Estimate for WOR’s fiscal 2023 earnings is pegged at $5.65 per share. The consensus estimate for 2023 earnings has moved north by 22.6% in the past 60 days. Its shares gained 52.2% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 256.3%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at $1.12 per share. The consensus estimate for 2023 earnings has moved 7.8% north in the past 60 days. MTW’s shares gained 57.8% in the last year.
The Zacks Consensus Estimate for Terex’s 2023 earnings per share is pegged at $1.61. Estimates were unchanged in the last 60 days. It has a trailing four-quarter average earnings surprise of 27.1%. TEX gained 81.3% in the last year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Lincoln Electric (LECO) Q2 Earnings Beat, Revenues Rise Y/Y
Lincoln Electric Holdings, Inc. (LECO - Free Report) reported record adjusted earnings of $2.44 per share in the second quarter of 2023, beating the Zacks Consensus Estimate of $2.32. The bottom line increased 12% year over year.
Including one-time items, the bottom line was a record $2.36 per share compared with $2.18 in the prior-year quarter.
Total revenues rose 9.4% year over year to a record $1,061 million. However, the top line missed the Zacks Consensus Estimate of $1,099 million. The improvement in revenues can be attributed to 4.5% growth in organic sales and 5.2% benefits from acquisitions. These gains were partly offset by unfavorable foreign currency exchange of 0.2%.
Our model predicted organic sales growth of 7.7% and 5.1% benefits from acquisitions. We expected headwinds from currency exchange to be 0.4%.
Costs and Margins
The cost of goods sold rose 8% to $687 million from the prior-year quarter. The gross profit increased 12% to $373 million. The gross margin was 35.2% compared with the year-ago quarter’s 34.4%.
Selling, general and administrative expenses increased 15.6% year over year to $193 million. Adjusted operating profit increased 9.5% to $184 million in the quarter. The adjusted operating margin was 17.3% in the reported quarter, flat year over year.
Lincoln Electric Holdings, Inc. Price, Consensus and EPS Surprise
Lincoln Electric Holdings, Inc. price-consensus-eps-surprise-chart | Lincoln Electric Holdings, Inc. Quote
Segmental Performance
Americas Welding: The segment’s total sales increased to $708 million from $625 million in the year-earlier quarter. The reported figure lagged our estimated revenues of $740 million. Adjusted operating income totaled $140 million compared with $118 million in the prior-year quarter. We estimated an adjusted operating income of $149 million.
International Welding: This segment’s revenues rose 6.5% year over year to $262 million in the reported quarter. We projected quarterly revenues of $260 million. The segment reported an adjusted operating profit of $34 million compared with the year-ago quarter’s $35 million. The reported figure surpassed our estimate of $33 million.
The Harris Products Group: The segment’s second-quarter total sales amounted to around $133 million, reflecting a year-over-year dip of 5%. The figure came below our projection of $138 million. Adjusted operating profit was $20 million compared with the prior-year quarter’s $18 million. Our prediction for the segment’s adjusted income was $19 million.
Financial Update
Lincoln Electric had cash and cash equivalents of around $220 million at the end of the second quarter of 2023 compared with $152 million at the second-quarter 2022 end. The company generated a record $199 million in cash flow from operations in the quarter under review, up 102% year over year. LECO returned $90 million to shareholders via dividends and share repurchases throughout the quarter.
Price Performance
Lincoln Electric’s shares have gained 44.8% in the past year compared with the industry’s growth of 17.6%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Lincoln Electric currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Industrial Products sector are Worthington Industries, Inc. (WOR - Free Report) , The Manitowoc Company, Inc. (MTW - Free Report) and Terex Corporation (TEX - Free Report) . WOR and MTW sport a Zacks Rank #1 (Strong Buy) at present, and TEX has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Worthington Industries has an average trailing four-quarter earnings surprise of 14.9%. The Zacks Consensus Estimate for WOR’s fiscal 2023 earnings is pegged at $5.65 per share. The consensus estimate for 2023 earnings has moved north by 22.6% in the past 60 days. Its shares gained 52.2% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 256.3%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at $1.12 per share. The consensus estimate for 2023 earnings has moved 7.8% north in the past 60 days. MTW’s shares gained 57.8% in the last year.
The Zacks Consensus Estimate for Terex’s 2023 earnings per share is pegged at $1.61. Estimates were unchanged in the last 60 days. It has a trailing four-quarter average earnings surprise of 27.1%. TEX gained 81.3% in the last year.