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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 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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