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Lincoln Electric (LECO) Misses on Q2 Earnings & Revenues
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Lincoln Electric Holdings, Inc. (LECO - Free Report) delivered adjusted earnings of $1.22 per share in second-quarter 2018, which climbed around 26% year over year. The Air Liquide Welding acquisition contributed 5 cents to adjusted earnings per share in the quarter. Earnings, however, missed the Zacks Consensus Estimate of $1.23.
Including one-time items, earnings in the reported quarter came in at $1.04 compared with 92 cents recorded in the prior-year quarter.
Total revenues jumped 26% year over year to $790 million, including a 16% benefit from acquisitions, 4.4% higher volumes, 4.9% increase in price and 0.7% from favorable foreign exchange. The year-over-year sales growth stemmed from strong industrial production trends and order rates. Sales, however, missed the Zacks Consensus Estimate of $793 million.
Lincoln Electric Holdings, Inc. Price, Consensus and EPS Surprise
Cost of goods sold escalated 26.6% year over year to $520 million. Gross profit advanced 25% year over year to $270 million. Gross margin contracted 30 basis points (bps) year over year to 34.2%.
Selling, general and administrative expenses flared up 25% to $164 million from $131 million recorded in the year-earlier quarter. Adjusted operating profit rose 18.8% year over year to $107 million in the reported quarter. Operating margin shrunk 60 bps year over year to 6.9%.
Financial Update
Lincoln Electric had cash and cash equivalents of $357 million at the end of the second quarter compared with $327 million recorded at the end of 2017. The company recorded cash flow from operations of $79.8 million in the April-June quarter compared with $75.4 million recorded in the year-earlier quarter.
Share Price Performance
Shares of the company have outperformed the industry, over the past year. The stock has gained around 4% compared with the 1.6% loss recorded by the industry during the same time period.
Zacks Rank & Key Picks
Lincoln Electric currently carries a Zacks Rank #3 (Hold).
Actuant has a long-term earnings growth rate of 15.6%. Its shares have rallied around 12%, over the past year.
Grainger has a long-term earnings growth rate of 12.5%. The company’s shares have surged 99% in the past year.
DMC Global has a long-term earnings growth rate of 20%. The company’s shares have appreciated 267% in a year’s time.
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Lincoln Electric (LECO) Misses on Q2 Earnings & Revenues
Lincoln Electric Holdings, Inc. (LECO - Free Report) delivered adjusted earnings of $1.22 per share in second-quarter 2018, which climbed around 26% year over year. The Air Liquide Welding acquisition contributed 5 cents to adjusted earnings per share in the quarter. Earnings, however, missed the Zacks Consensus Estimate of $1.23.
Including one-time items, earnings in the reported quarter came in at $1.04 compared with 92 cents recorded in the prior-year quarter.
Total revenues jumped 26% year over year to $790 million, including a 16% benefit from acquisitions, 4.4% higher volumes, 4.9% increase in price and 0.7% from favorable foreign exchange. The year-over-year sales growth stemmed from strong industrial production trends and order rates. Sales, however, missed the Zacks Consensus Estimate of $793 million.
Lincoln Electric Holdings, Inc. Price, Consensus and EPS Surprise
Lincoln Electric Holdings, Inc. Price, Consensus and EPS Surprise | Lincoln Electric Holdings, Inc. Quote
Costs and Margins
Cost of goods sold escalated 26.6% year over year to $520 million. Gross profit advanced 25% year over year to $270 million. Gross margin contracted 30 basis points (bps) year over year to 34.2%.
Selling, general and administrative expenses flared up 25% to $164 million from $131 million recorded in the year-earlier quarter. Adjusted operating profit rose 18.8% year over year to $107 million in the reported quarter. Operating margin shrunk 60 bps year over year to 6.9%.
Financial Update
Lincoln Electric had cash and cash equivalents of $357 million at the end of the second quarter compared with $327 million recorded at the end of 2017. The company recorded cash flow from operations of $79.8 million in the April-June quarter compared with $75.4 million recorded in the year-earlier quarter.
Share Price Performance
Shares of the company have outperformed the industry, over the past year. The stock has gained around 4% compared with the 1.6% loss recorded by the industry during the same time period.
Zacks Rank & Key Picks
Lincoln Electric currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the same sector include Actuant Corporation , W.W. Grainger, Inc. (GWW - Free Report) and DMC Global Inc. (BOOM - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Actuant has a long-term earnings growth rate of 15.6%. Its shares have rallied around 12%, over the past year.
Grainger has a long-term earnings growth rate of 12.5%. The company’s shares have surged 99% in the past year.
DMC Global has a long-term earnings growth rate of 20%. The company’s shares have appreciated 267% in a year’s time.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>