Zinger Key Points
- Linde Q4 sales up 5% Y/Y to $8.28B, missing estimates; adjusted EPS of $3.97 beats expectations.
- FY25 adjusted EPS guidance set at $16.15-$16.55 vs. $16.83 consensus; capital expenditures projected at $5B-$5.5B.
Linde PLC LIN shares are trading lower after the company reported fourth-quarter FY24 results.
- Sales rose 5% Y/Y to $8.28 billion, underlying sales up 2% Y/Y, missing the consensus of $8.39 billion.
- Americas sales rose 1% Y/Y to $3.61 billion, APAC (Asia Pacific) sales increased 2% Y/Y to $1.67 billion and, EMEA (Europe, Middle East & Africa) sales was down 2% Y/Y to $2.06 billion in the quarter.
- Linde Engineering sales stood at $628 million, down 5% Y/Y, in the quarter.
- Adjusted operating profit increased 9% Y/Y to $2.48 billion, with margin expanding 250 basis points Y/Y to 29.9%, led by increased price and continued productivity initiatives across all segments.
- Adjusted EPS was $3.97, beating the consensus of $3.93.
- As of FY24, Linde's total project backlog stood at $10.4 billion. The company returned $7.1 billion to shareholders through dividends and share repurchases in the year.
- Operating cash flow stood at $9.4 billion, with capital expenditures of $4.5 billion in the year.
Outlook: For the first-quarter of FY25, the company expects adjusted EPS of $3.85 – $3.95 (up 7%-9% ex. FX), vs. consensus of $4.02.
Linde projects FY25 adjusted EPS of $16.15-$16.55 (up 8%-11% Y/Y ex. FX) vs. street view of $16.83.
The company expects FY25 capital expenditures of $5 billion-$5.5 billion to support operating and growth requirements, which includes the contractual sale of gas backlog.
CEO Sanjiv Lamba praised the company’s 25.9% ROC, 29.5% operating margin and EPS growth of 10% excluding currency.
“The results were delivered despite the challenging environment, reflecting the resiliency of our model and the exceptional execution by our employees,” Lamba said.
Linde also signed its largest ever product supply agreement with a customer, supporting a $10 billion project backlog which Lamba expects will contribute to earnings growth “for years to come.”
Investors can gain exposure to the stock via iShares U.S. Basic Materials ETF IYM and Materials Select Sector SPDR XLB.
Price Action: LIN shares are down 2.36% at $443 premarket at the last check Thursday.
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