Lincoln Electric Q2 Earnings Beat, Revenues Dip Y/Y

Lincoln Electric Holdings, Inc. LECO reported adjusted earnings of $2.34 per share in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.30. The bottom line decreased 4.1% year over year.

Including one-time items, the bottom line was $1.77 per share compared with $2.36 in the prior-year quarter.

Total revenues fell 3.7% year over year to $1.02 billion. However, the top line marginally beat the Zacks Consensus Estimate of $1.01 billion. The decline was due to a 4.4% fall in organic sales, partially offset by a 1.2% benefit from acquisitions.

Costs & Margins

The cost of goods sold fell 7.2% to $638 million from the prior-year quarter. The gross profit increased 2.8% to $384 million. The gross margin was 37.6% compared with the year-ago quarter's 35.2%.

Selling, general and administrative expenses increased 8.2% year over year to $208.5 million. Adjusted operating profit decreased 3.6% to $178 million in the quarter. The adjusted operating margin was 17.4% in the reported quarter, flat year over year.

Segmental Performance

Americas Welding: The segment's total sales decreased to $687 million from $708 million in the year-earlier quarter. The reported figure lagged our estimated revenues of $714 million. Adjusted operating income totaled $137 million compared with $140 million in the prior-year quarter. We estimated an adjusted operating income of $131 million.

International Welding: This segment's revenues fell 5.4% year over year to $248 million in the reported quarter. We projected quarterly revenues of $251 million. The segment reported an adjusted operating profit of $26 million compared with the year-ago quarter's $34 million. The reported figure missed our estimate of $29 million.

The Harris Products Group: The segment's second-quarter total sales amounted to around $137 million, reflecting a year-over-year rise of 3.2%. The figure beat our estimate of $133 million. Adjusted operating profit was $25 million compared with the prior-year quarter's $20 million. Our prediction for the segment's adjusted income was $22 million.

Financial Update

Lincoln Electric had cash and cash equivalents of around $223 million at the end of the second quarter of 2024 compared with $394 million at the 2023 end.  The company generated $171 million in cash flow from operations in the quarter under review compared with $199 million in the year-ago quarter. LECO returned $91 million to shareholders via dividends and share repurchases throughout the quarter.

Price Performance

Lincoln Electric's shares have gained 3.4% in the past year compared with the industry's growth of 10.3%.

Image Source: Zacks Investment Research

Zacks Rank

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

Peer Performances

Stanley Black & Decker, Inc. SWK reported second-quarter 2024 adjusted earnings of $1.09 per share, which beat the Zacks Consensus Estimate of 85 cents. The company reported a loss of 11 cents per share in the year-ago quarter.

Stanley Black's net sales of $4.02 billion beat the consensus estimate of $4.01 billion. The top line declined 3.2% year over year due to weakness in the Industrial segment.

Enerpac Tool Group Corp. EPAC reported third-quarter fiscal 2024 (ended May 31 2024) adjusted earnings of 47 cents per share, in line with the Zacks Consensus Estimate. The company reported earnings of 39 cents per share in the year-ago quarter.

EPAC's net sales of $150 million missed the consensus estimate of $153 million. The top line declined 4% year over year.

Manufacturing Stock Awaiting Results

Kennametal Inc. KMT is set to release its fourth-quarter fiscal 2024 results on Aug 7.

The Zacks Consensus Estimate for KMT's earnings per share is pegged at 44 cents for the fiscal fourth quarter, suggesting a decline of 13.7% from the year-ago reported figure. The Zacks Consensus Estimate for total revenues is pinned at $532.1 million, indicating a year-over-year decrease of 3.3%.

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