Free Research Report as Lincoln’s Net Sales Surged 26%; Non-GAAP EPS Also Advanced 26%

LONDON, UK / ACCESSWIRE / July 31, 2018 / If you want access to our free earnings report on Lincoln Electric Holdings, Inc. (NASDAQ: LECO), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=LECO. Lincoln Electric reported its second quarter fiscal 2018 operating and financial results on July 23, 2018. The manufacturer of specialized welding products and other equipment reported lower than expected revenue and earnings results. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Lincoln Electric Holdings most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=LECO

Earnings Highlights and Summary

For the second quarter 2018, Lincoln Electric’s sales surged 26.0% to $790.1 million compared to $626.9 million in Q2 2017, driven by a 16.0% benefit from acquisitions, a 4.9% increase in price, 4.4% higher volumes, and 0.7% from favorable foreign exchange. The Company’s reported numbers lagged behind analysts’ estimates of $794.2 million.

During Q2 2018, Lincoln Electric’s gross profit margin declined modestly by 30 basis points (bps) to 34.2% due to the addition of Air Liquide Welding. Excluding the acquisition and special items, the Company’s reported quarter gross profit margin was 35%, reflecting a 50 bps increase versus the prior year on volumes and favorable mix. Margin performance was unfavorably impacted by a $5.3 million LIFO charge in its Americas Welding segment.

For Q2 2018, Lincoln Electric’s selling, general, and administrative (SG&A) expense increased 25% to $163.9 million, or 20.8% of sales, due to the addition of Air Liquide Welding and acquisition-related expenses. Excluding the acquisition and special items, the Company’s SG&A expense increased 11% to $140.2 million. The increase was primarily due to higher incentive compensation, professional service fees, and salary and wage costs.

Lincoln Electric’s operating income was $94.6 million, or 12.0% of sales, for Q2 2018 compared to operating income of $85.6 million, or 13.7% of sales, in Q2 2017. On an adjusted basis, the Company’s operating income increased 18.8% to $107.0 million, or 13.5% of sales, compared to $90.1 million, or 14.4% of sales, in the prior year’s corresponding period. The Air Liquide Welding acquisition had an unfavorable impact of approximately 120 bps to the adjusted operating income margin.

Lincoln Electric’s Q2 2018 effective tax rate was 27.0% due to special items. Excluding special items, the effective tax rate was 24.6% versus 26.7% in the comparable 2017 period.

Lincoln Electric posted net income of $68.9 million, or $1.04 per diluted share, in Q2 2018 compared to $61.4 million, or $0.92 per diluted share, in Q2 2017. The Company’s results included special item after-tax charges of $11.5 million, or $0.18 per share, in the reported quarter. Excluding these items, Lincoln Electric’s adjusted net income increased 24.0% to $80.4 million, or $1.22 per share, in Q2 2018 compared to $64.8 million, or $0.97 per share in the prior year’s same period, but fell short of Wall Street’s estimates of $1.23 per share.

Lincoln Electric Holdings’ Segment Results

During Q2 2018, the International Welding segment’s sales totaled $243.4 million and its organic sales increased 1% with 5.5% higher price and a 4.5% decline in volumes. The segment’s volumes were impacted by acquisition integration activities and lower European sales. The segment’s adjusted earnings before interest and tax (EBIT) soared 71.4% to $16.3 million due to the addition of Air Liquide Welding, pricing management and growth in Asia/Pacific. The segment’s adjusted EBIT margin performed steady with the prior year at 6.5%, reflecting solid execution of the Company’s integration activities.

In Q2 2018, the Harris Products Group’s sales came in at $84.2 million, while EBIT margin held steady at 11.8% as volumes increased 3.5% from solid demand across all sales channels and against challenging prior year’s comparisons.

Cash Matters

Lincoln Electric’s cash flows from operations increased 6% to $80 million in Q2 2018 on improved working capital efficiency. The Company’s average operating working capital was 16.5%, a 20-basis point (bps) improvement compared to the prior year’s same period. Excluding Air Liquide Welding, Lincoln’s average operating working capital ratio improved approximately 150 bps to 15.2%.

Stock Performance Snapshot

July 30, 2018 – At Monday’s closing bell, Lincoln Electric’s stock marginally fell 0.62%, ending the trading session at $91.75.

Volume traded for the day: 244.33 thousand shares.

Stock performance in the last month – up 5.81%; previous three-month period – up 10.72%; past twelve-month period – up 5.73%; and year-to-date – up 0.19%

After yesterday’s close, Lincoln Electric’s market cap was at $6.00 billion.

Price to Earnings (P/E) ratio was at 21.12.

The stock has a dividend yield of 1.70%.

The stock is part of the Industrial Goods sector, categorized under the Small Tools & Accessories industry.

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