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Linde (LIN) Q2 Earnings & Revenues Beat on Prices & Volumes

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Linde plc LIN announced second-quarter 2021 adjusted earnings from continuing operations of $2.70 per share, surpassing the Zacks Consensus Estimate of $2.56 and improving from the year-ago profit of $1.90.

Total revenues of $7,584 million beat the Zacks Consensus Estimate of $7,392 million and improved from the year-ago quarter’s $6,377 million.

The strong results were driven by increased demand from end markets and project start-ups that led to higher volumes and prices.

Linde plc Price, Consensus and EPS Surprise

Linde plc Price, Consensus and EPS Surprise
Linde plc Price, Consensus and EPS Surprise

Linde plc price-consensus-eps-surprise-chart | Linde plc Quote

Dividend & Stock Repurchases

Through the June quarter, the leading producer of industrial gases has returned to shareholders a capital of $1,748 million that comprises both dividends and stock repurchases.

Segment Highlights

Operating profit in the Americas segment was up 40% year over year to $871 million on higher pricing and volumes. The increase in prices and volumes was aided by strong demand from most of the project start-ups and end-markets.

Profit in the EMEA segment increased 61% year over year to $487 million, thanks to increased volumes and pricing across all end markets.

Profit in the APAC segment increased 32.3% year over year to $389 million. The upside can be attributed to higher demand from project start-ups and end markets that aided pricing and volumes.

Operating profit at the Engineering segment fell 21.7% year over year to $108 million.

Backlogs

At the end of the June quarter, the company’s total backlog was recorded at $7.5 billion. The company has a sale-of-gas backlog of $3.4 billion and sale-of-plant backlog of $4.1 billion.

Capital Investment & Balance Sheet

Linde reported capital expenditure for the June quarter at $744 million. The company ended the second quarter with cash and cash equivalents of around $3.1 billion. Long-term debt was $9.9 billion, representing debt to capitalization of 22.4%.

Guidance

For the September quarter, the company projects adjusted diluted earnings per share from continuing operations in the band of $2.6 to $2.7. For 2021, the firm is expecting adjusted diluted earnings per share from continuing operations in the range of $10.1 to $10.3. This represents upward revisions from the prior projected 2021 adjusted diluted earnings per share from continuing operations of $9.6 to $9.8.

For supporting maintenance and growth projects, the company has set a capital budget for this year of $3 billion to $3.4 billion.

Zacks Rank & Other Stocks to Consider

The company currently has a Zacks Rank #2 (Buy). Other prospective players in the basic material space include AvientCorporation AVNT, Dow Inc. DOW and Cabot Corporation CBT. While Avient carries a Zacks Rank #2, Dow and Cabot sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Avient has witnessed upward earnings estimate revisions for 2021 in the past 30 days.

Dow is expected to witness earnings growth of 403% in 2021.

Cabot is likely to see earnings growth of 137.5% in fiscal 2021.


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