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Lincoln Electric (LECO) Q2 Earnings & Sales Lag Estimates

Zacks Equity Research

Lincoln Electric Holdings, Inc. LECO delivered adjusted earnings of $1.28 per share in second-quarter 2019, up 4.9% year over year. The reported figure, however, missed the Zacks Consensus Estimate of $1.30.

Including one-time items, earnings in the reported quarter came in at $1.36 compared with $1.04 recorded in the prior-year quarter.

Total revenues edged down 1.7% year over year to $777 million, with 3.5% decrease in organic sales and 1.7% from unfavorable foreign-currency translation in the reported quarter. However, the revenue decline was partly offset by 3.4% benefit from acquisitions. Sales figure also missed the Zacks Consensus Estimate of $790 million.

Lincoln Electric Holdings, Inc. Price, Consensus and EPS Surprise

Lincoln Electric Holdings, Inc. Price, Consensus and EPS Surprise

Lincoln Electric Holdings, Inc. price-consensus-eps-surprise-chart | Lincoln Electric Holdings, Inc. Quote

Costs and Margins

Cost of goods sold was down 2.5% to $507 million from $520 million recorded in the prior-year quarter. Gross profit inched down to $269.9 million from the prior-year quarter’s $270.1 million. Gross margin came in at 34.7% compared with the prior-year quarter’s 34.2%.

Selling, general and administrative expenses slipped 0.6% to $163.4 million from the year-earlier quarter. Adjusted operating profit edged down 1% year over year to $105.9 million in the quarter. Operating margin came in at 13.6% compared with 13.5% witnessed in the year-ago quarter.
 
Financial Update

Lincoln Electric had cash and cash equivalents of $189.8 million at the end of the second quarter compared with $357 million at the end of the prior-year quarter. The company recorded cash flow from operations of $126 million during the April-June quarter compared with $79.8 million witnessed in the year-earlier period.

During the second quarter, Lincoln Electric returned $115 million to shareholders through dividend and share repurchases.

Price Performance

Lincoln Electric’s shares have declined 1.7% over the past year compared with the industry’s growth of 4.5%.



Zacks Rank and Stocks to Consider

Lincoln Electric currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Roper Technologies, Inc. ROP, John Bean Technologies Corp. JBT and CECO Environmental Corp. CECE, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here

Roper Technologies has an estimated earnings growth rate of 9.8% for the ongoing year. The company’s shares have gained 30.3% in the past year.

John Bean Technologies has an expected earnings growth rate of 5.9% for the current year. The stock has appreciated 33.1% in a year’s time.

CECO Environmental has an impressive projected earnings growth rate of 84.8% for 2019. The company’s shares have rallied 29.6% over the past year.

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