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Why Is Lincoln Electric (LECO) Down 2.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Lincoln Electric Holdings (LECO - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Lincoln Electric due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Lincoln Electric (LECO - Free Report) Q2 Earnings Beat, Revenues Dip Y/Y
Lincoln Electric reported adjusted earnings of $2.34 per share in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.30. The bottom line decreased 4.1% year over year.
Including one-time items, the bottom line was $1.77 per share compared with $2.36 in the prior-year quarter.
Total revenues fell 3.7% year over year to $1.02 billion. However, the top line marginally beat the Zacks Consensus Estimate of $1.01 billion. The decline was due to a 4.4% fall in organic sales, partially offset by a 1.2% benefit from acquisitions.
Costs & Margins
The cost of goods sold fell 7.2% to $638 million from the prior-year quarter. The gross profit increased 2.8% to $384 million. The gross margin was 37.6% compared with the year-ago quarter’s 35.2%.
Selling, general and administrative expenses increased 8.2% year over year to $208.5 million. Adjusted operating profit decreased 3.6% to $178 million in the quarter. The adjusted operating margin was 17.4% in the reported quarter, flat year over year.
Segmental Performance
Americas Welding: The segment’s total sales decreased to $687 million from $708 million in the year-earlier quarter. The reported figure lagged our estimated revenues of $714 million. Adjusted operating income totaled $137 million compared with $140 million in the prior-year quarter. We estimated an adjusted operating income of $131 million.
International Welding: This segment’s revenues fell 5.4% year over year to $248 million in the reported quarter. We projected quarterly revenues of $251 million. The segment reported an adjusted operating profit of $26 million compared with the year-ago quarter’s $34 million. The reported figure missed our estimate of $29 million.
The Harris Products Group: The segment’s second-quarter total sales amounted to around $137 million, reflecting a year-over-year rise of 3.2%. The figure beat our estimate of $133 million. Adjusted operating profit was $25 million compared with the prior-year quarter’s $20 million. Our prediction for the segment’s adjusted income was $22 million.
Financial Update
Lincoln Electric had cash and cash equivalents of around $223 million at the end of the second quarter of 2024 compared with $394 million at the 2023 end. The company generated $171 million in cash flow from operations in the quarter under review compared with $199 million in the year-ago quarter. LECO returned $91 million to shareholders via dividends and share repurchases throughout the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Lincoln Electric has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Lincoln Electric has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Lincoln Electric is part of the Zacks Manufacturing - Tools & Related Products industry. Over the past month, Stanley Black & Decker (SWK - Free Report) , a stock from the same industry, has gained 0.4%. The company reported its results for the quarter ended June 2024 more than a month ago.
Stanley Black & Decker reported revenues of $4.02 billion in the last reported quarter, representing a year-over-year change of -3.2%. EPS of $1.09 for the same period compares with -$0.11 a year ago.
Stanley Black & Decker is expected to post earnings of $1.02 per share for the current quarter, representing a year-over-year change of -2.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +13%.
Stanley Black & Decker has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Why Is Lincoln Electric (LECO) Down 2.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Lincoln Electric Holdings (LECO - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Lincoln Electric due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Lincoln Electric (LECO - Free Report) Q2 Earnings Beat, Revenues Dip Y/Y
Lincoln Electric reported adjusted earnings of $2.34 per share in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.30. The bottom line decreased 4.1% year over year.
Including one-time items, the bottom line was $1.77 per share compared with $2.36 in the prior-year quarter.
Total revenues fell 3.7% year over year to $1.02 billion. However, the top line marginally beat the Zacks Consensus Estimate of $1.01 billion. The decline was due to a 4.4% fall in organic sales, partially offset by a 1.2% benefit from acquisitions.
Costs & Margins
The cost of goods sold fell 7.2% to $638 million from the prior-year quarter. The gross profit increased 2.8% to $384 million. The gross margin was 37.6% compared with the year-ago quarter’s 35.2%.
Selling, general and administrative expenses increased 8.2% year over year to $208.5 million. Adjusted operating profit decreased 3.6% to $178 million in the quarter. The adjusted operating margin was 17.4% in the reported quarter, flat year over year.
Segmental Performance
Americas Welding: The segment’s total sales decreased to $687 million from $708 million in the year-earlier quarter. The reported figure lagged our estimated revenues of $714 million. Adjusted operating income totaled $137 million compared with $140 million in the prior-year quarter. We estimated an adjusted operating income of $131 million.
International Welding: This segment’s revenues fell 5.4% year over year to $248 million in the reported quarter. We projected quarterly revenues of $251 million. The segment reported an adjusted operating profit of $26 million compared with the year-ago quarter’s $34 million. The reported figure missed our estimate of $29 million.
The Harris Products Group: The segment’s second-quarter total sales amounted to around $137 million, reflecting a year-over-year rise of 3.2%. The figure beat our estimate of $133 million. Adjusted operating profit was $25 million compared with the prior-year quarter’s $20 million. Our prediction for the segment’s adjusted income was $22 million.
Financial Update
Lincoln Electric had cash and cash equivalents of around $223 million at the end of the second quarter of 2024 compared with $394 million at the 2023 end. The company generated $171 million in cash flow from operations in the quarter under review compared with $199 million in the year-ago quarter. LECO returned $91 million to shareholders via dividends and share repurchases throughout the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Lincoln Electric has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Lincoln Electric has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Lincoln Electric is part of the Zacks Manufacturing - Tools & Related Products industry. Over the past month, Stanley Black & Decker (SWK - Free Report) , a stock from the same industry, has gained 0.4%. The company reported its results for the quarter ended June 2024 more than a month ago.
Stanley Black & Decker reported revenues of $4.02 billion in the last reported quarter, representing a year-over-year change of -3.2%. EPS of $1.09 for the same period compares with -$0.11 a year ago.
Stanley Black & Decker is expected to post earnings of $1.02 per share for the current quarter, representing a year-over-year change of -2.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +13%.
Stanley Black & Decker has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.