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Lincoln Electric (LECO) Q1 Earnings Beat Estimates, Up Y/Y
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Lincoln Electric Holdings, Inc. (LECO - Free Report) reported record first-quarter 2021 adjusted earnings of $1.37 per share, which beat the Zacks Consensus Estimate of $1.18. The bottom line also improved 37% year over year. The upbeat performance can be attributed to the company’s execution of strategic initiatives, cost reduction actions and recovery in its end markets.
Including one-time items, the bottom line was $1.23 compared with 91 cents in the prior-year quarter.
Total revenues increased 7.8% year over year to $757 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $724 million. The improvement in revenues was owing to growth of 6.4% in organic sales and a favorable impact of 1.4% from foreign exchange.
Lincoln Electric Holdings, Inc. Price, Consensus and EPS Surprise
Cost of goods sold went up 8% to $503 million from the prior-year quarter. Gross profit rose 7% to $254 million from $237 million reported in the prior-year quarter. Gross margin came in at 33.5% compared with 33.8% in the year-ago quarter.
Selling, general and administrative expenses declined 3% year over year to $146 million from the prior-year quarter. Adjusted operating profit increased 24% year over year to $109 million in the quarter. Adjusted operating margin was 14.4% in the reported quarter compared with 12.6% in the year-ago quarter.
Segment Performance
Americas Welding: Sales in the segment increased to $456 million from $443 million reported in the year-earlier period. Adjusted operating for the segment totaled $76 million in the quarter compared with $71 million witnessed in the prior-year quarter.
International Welding: This segment’s revenues increased 12% year over year to $227 million in the reported quarter. The segment reported adjusted operating profit of $19 million compared with the year-ago quarter’s $6.6 million.
The Harris Products Group: The segment’s first-quarter sales amounted to around $111 million, indicating year-over-year improvement of 27%. The segment’s adjusted operating profit was $18.7 million compared with $12.5 million in the prior-year quarter.
Financial Update
Lincoln Electric had cash and cash equivalents of around $242 million at the end of the first quarter of 2021 compared with $257 million at the end of the 2020. The company generated cash flow from operations of $45 million during the reported quarter compared with $22 million in the prior-year quarter.
The company’s debt to invested capital was at 47.2% at the end of the first quarter of 2021 compared with 47.6% as of the end of 2020.
Price Performance
Lincoln Electric’s shares have gained 60.1% over the past year compared with the industry’s growth of 30.4%.
Zacks Rank and Stocks to Consider
Lincoln Electric currently carries a Zacks Rank #3 (Hold).
Dover has a projected earnings growth rate of 21.8% for 2021. Over the past year, the company’s shares have gained 56%.
Caterpillar has an estimated earnings growth rate of 25.7% for the ongoing year. The company’s shares have rallied 99% in the past year.
Pentair has an expected earnings growth rate of 11.6% for 2021. The stock has surged 86% in a year’s time.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Lincoln Electric (LECO) Q1 Earnings Beat Estimates, Up Y/Y
Lincoln Electric Holdings, Inc. (LECO - Free Report) reported record first-quarter 2021 adjusted earnings of $1.37 per share, which beat the Zacks Consensus Estimate of $1.18. The bottom line also improved 37% year over year. The upbeat performance can be attributed to the company’s execution of strategic initiatives, cost reduction actions and recovery in its end markets.
Including one-time items, the bottom line was $1.23 compared with 91 cents in the prior-year quarter.
Total revenues increased 7.8% year over year to $757 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $724 million. The improvement in revenues was owing to growth of 6.4% in organic sales and a favorable impact of 1.4% from foreign exchange.
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 went up 8% to $503 million from the prior-year quarter. Gross profit rose 7% to $254 million from $237 million reported in the prior-year quarter. Gross margin came in at 33.5% compared with 33.8% in the year-ago quarter.
Selling, general and administrative expenses declined 3% year over year to $146 million from the prior-year quarter. Adjusted operating profit increased 24% year over year to $109 million in the quarter. Adjusted operating margin was 14.4% in the reported quarter compared with 12.6% in the year-ago quarter.
Segment Performance
Americas Welding: Sales in the segment increased to $456 million from $443 million reported in the year-earlier period. Adjusted operating for the segment totaled $76 million in the quarter compared with $71 million witnessed in the prior-year quarter.
International Welding: This segment’s revenues increased 12% year over year to $227 million in the reported quarter. The segment reported adjusted operating profit of $19 million compared with the year-ago quarter’s $6.6 million.
The Harris Products Group: The segment’s first-quarter sales amounted to around $111 million, indicating year-over-year improvement of 27%. The segment’s adjusted operating profit was $18.7 million compared with $12.5 million in the prior-year quarter.
Financial Update
Lincoln Electric had cash and cash equivalents of around $242 million at the end of the first quarter of 2021 compared with $257 million at the end of the 2020. The company generated cash flow from operations of $45 million during the reported quarter compared with $22 million in the prior-year quarter.
The company’s debt to invested capital was at 47.2% at the end of the first quarter of 2021 compared with 47.6% as of the end of 2020.
Price Performance
Lincoln Electric’s shares have gained 60.1% over the past year compared with the industry’s growth of 30.4%.
Zacks Rank and Stocks to Consider
Lincoln Electric currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Dover Corporation (DOV - Free Report) , Caterpillar Inc. (CAT - Free Report) and Pentair plc (PNR - Free Report) , each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dover has a projected earnings growth rate of 21.8% for 2021. Over the past year, the company’s shares have gained 56%.
Caterpillar has an estimated earnings growth rate of 25.7% for the ongoing year. The company’s shares have rallied 99% in the past year.
Pentair has an expected earnings growth rate of 11.6% for 2021. The stock has surged 86% in a year’s time.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>