Lincoln Electric (NASDAQ:LECO) Announces Quarterly Earnings Results

Lincoln Electric (NASDAQ:LECO) released its quarterly earnings results on Thursday. The industrial products company reported $2.50 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $2.43 by $0.07, Briefing.com reports. Lincoln Electric had a return on equity of 39.35% and a net margin of 12.30%.The business had revenue of $1.12 billion during the quarter, compared to the consensus estimate of $1.07 billion. During the same period in the previous year, the company posted $2.16 EPS. The business’s quarterly revenue was up 11.7% compared to the same quarter last year.

Here are the key takeaways from Lincoln Electric’s conference call:

• Record quarterly sales of $1.121B and adjusted EPS of $2.50 were reported, but results were driven mainly by ~10% price increases and the Alloy Steel acquisition while consolidated volumes declined ~2.6%.
• Management implemented new pricing actions (effective early May) and expects to reach price-cost neutrality by Q3, increasing full-year net sales guidance to high single-digit growth (about three-quarters price / one-quarter volume).
• Demand is improving in the Americas—consumables showed low-double-digit volume gains, orders and backlog strengthened into April, and automation is expected to return to modest growth in Q2 with further improvement in H2.
• International performance was pressured by automation project timing and the Middle East conflict, which management estimates is reducing sales by roughly $8–10M per quarter and contributed to a 10% volume decline in International Welding.
• Cash and capital allocation remain disciplined—operating cash flow was $102M (temporarily impacted by higher inventories to support service levels), the company returned $101M via dividends and buybacks, and adjusted ROIC stayed at 21.5%.

Lincoln Electric Price Performance

Shares of LECO traded up $7.49 during mid-day trading on Thursday, hitting $265.00. 851,706 shares of the stock were exchanged, compared to its average volume of 378,582. The firm has a 50-day moving average of $262.05 and a two-hundred day moving average of $253.39. Lincoln Electric has a 52-week low of $175.89 and a 52-week high of $310.00. The company has a debt-to-equity ratio of 0.78, a quick ratio of 1.16 and a current ratio of 1.82. The company has a market cap of $14.53 billion, a PE ratio of 28.43, a price-to-earnings-growth ratio of 1.62 and a beta of 1.28.

Lincoln Electric Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, July 15th. Shareholders of record on Tuesday, June 30th will be paid a $0.79 dividend. The ex-dividend date of this dividend is Tuesday, June 30th. This represents a $3.16 dividend on an annualized basis and a yield of 1.2%. Lincoln Electric’s payout ratio is presently 33.91%.

Analyst Ratings Changes

A number of brokerages have commented on LECO. Wall Street Zen cut shares of Lincoln Electric from a “buy” rating to a “hold” rating in a report on Saturday, February 28th. Weiss Ratings upgraded shares of Lincoln Electric from a “hold (c+)” rating to a “buy (b-)” rating in a research note on Thursday, April 16th. Barclays reduced their price objective on Lincoln Electric from $310.00 to $280.00 and set an “overweight” rating for the company in a research note on Wednesday, April 1st. Roth Mkm reiterated a “buy” rating and issued a $297.00 price target (up from $285.00) on shares of Lincoln Electric in a research report on Tuesday, February 3rd. Finally, KeyCorp increased their price objective on shares of Lincoln Electric from $280.00 to $340.00 and gave the stock an “overweight” rating in a research note on Friday, February 13th. Five research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of “Hold” and an average target price of $291.14.

Hedge Funds Weigh In On Lincoln Electric

Institutional investors have recently bought and sold shares of the business. JPMorgan Chase & Co. grew its stake in shares of Lincoln Electric by 14.1% in the 4th quarter. JPMorgan Chase & Co. now owns 1,280,116 shares of the industrial products company’s stock worth $306,767,000 after buying an additional 158,305 shares in the last quarter. AQR Capital Management LLC raised its position in shares of Lincoln Electric by 32.3% during the 4th quarter. AQR Capital Management LLC now owns 961,732 shares of the industrial products company’s stock valued at $230,469,000 after buying an additional 234,783 shares in the last quarter. Invesco Ltd. lifted its holdings in shares of Lincoln Electric by 31.8% in the 3rd quarter. Invesco Ltd. now owns 919,926 shares of the industrial products company’s stock valued at $216,946,000 after acquiring an additional 221,853 shares during the last quarter. Boston Partners grew its position in Lincoln Electric by 24.6% in the third quarter. Boston Partners now owns 850,201 shares of the industrial products company’s stock worth $200,517,000 after acquiring an additional 167,773 shares in the last quarter. Finally, Dimensional Fund Advisors LP grew its position in Lincoln Electric by 1.8% in the fourth quarter. Dimensional Fund Advisors LP now owns 542,767 shares of the industrial products company’s stock worth $130,084,000 after acquiring an additional 9,769 shares in the last quarter. Institutional investors own 79.61% of the company’s stock.

About Lincoln Electric

Lincoln Electric Holdings, Inc (NASDAQ: LECO) is a global manufacturer and distributor of welding products, robotic welding systems, plasma and oxyfuel cutting equipment, and surface treatment systems. The company’s portfolio encompasses welding consumables such as electrodes and wires, as well as power sources, torches, and automated welding cells. Lincoln Electric also offers software solutions and training services designed to optimize productivity and quality in fabrication and manufacturing operations.

Founded in 1895 by John C.