Lincoln Electric Sales Jump 15.1% On Volume, And The Dividend Rises 10.1%
The welding maker's organic sales rose 14.5%, led by volume, and adjusted earnings per share reached $2.98 from $2.47.
Lincoln Electric, which makes welding and cutting equipment and the supplies that go with it, said Tuesday that third-quarter net sales rose 15.1% to $1,221.3 million, with volume doing most of the work. The board also raised the quarterly dividend 10.1%, to $0.87 a share.
Volume did the heavy lifting
Organic sales grew 14.5%, acquisitions added 0.5% and favorable currency 0.1%, the company reported in an 8-K press release. Its segment table puts volume at 8.8 points of the 15.1% gain and price at 5.7 points.
Net income was $144.3 million, or $2.63 a diluted share, against $2.21 a year earlier. Excluding special items, adjusted earnings per share rose to $2.98 from $2.47. Chairman and CEO Steven B. Hedlund called it "record adjusted earnings per share."
Operating income was $211.4 million, or 17.3% of sales, versus 16.6% a year earlier. Adjusted operating margin reached 18.0%, from 17.4%.
Harris surges, International lags
The Harris Products Group, which covers cutting, soldering and brazing, and specialty gas equipment, grew sales 28.9%. Price contributed 25.7 points of that. Americas Welding rose 15.8%, with volume adding 13.2 points, while International Welding rose 3.3%.
Lincoln Electric sells arc welding machines, filler metals, cutting systems and robotic automation to manufacturers and fabricators, mainly through distributors in the Americas.
Cash returned and a bigger payout
Operating cash flow was $216 million, a 107% conversion of adjusted net income, down from 149% a year earlier. The company returned $143 million to shareholders through dividends and buybacks.
Adjusted return on invested capital for the twelve months ended September 30 was 23.9%, up from 22.2%. The new $0.87 quarterly dividend, $3.48 annualized, is payable January 15, 2027 to holders of record December 31, 2026.
Management discusses the results on a webcast at 10:00 a.m. ET Tuesday.
