Lincoln Electric Q4 Earnings Top Estimates, Revenues Dip 3% Y/Y

Core Viewpoint - Lincoln Electric Holdings, Inc. (LECO) reported strong adjusted earnings for Q4 2024, exceeding expectations, despite a decline in total revenues and organic sales [1][2][9]. Financial Performance - Adjusted earnings per share for Q4 2024 were $2.57, surpassing the Zacks Consensus Estimate of $2.00, representing a 4.9% year-over-year increase [1] - Including one-time items, earnings were $2.47 per share, down from $2.70 in the same quarter last year [2] - Total revenues decreased by 3.4% year-over-year to $1.02 billion, but exceeded the Zacks Consensus Estimate of $996 million [2][10] - Organic sales fell by 7.5%, while foreign exchange had a negative impact of 1.1%, partially offset by a 5.2% contribution from acquisitions [2] Costs and Margins - Cost of goods sold decreased by 5% year-over-year to $653 million, leading to a gross profit decline of 0.6% to $369 million [3] - Gross margin improved to 36.1% from 35.1% in the previous year [3] - Selling, general and administrative expenses fell by 1% to $187 million, while adjusted operating profit rose by 1.9% to $186 million, resulting in an adjusted operating margin of 18.2% [4] Segment Performance - Americas Welding segment saw a slight sales increase of 0.2% to $692 million, with adjusted operating income rising to $132 million [5] - International Welding segment experienced a significant revenue drop of 16.3% to $254 million, with adjusted operating profit decreasing to $33 million [6] - The Harris Products Group reported a strong performance with sales up 11.3% to approximately $127 million and adjusted operating profit increasing to $22 million [7] Cash Flow and Balance Sheet - Cash and cash equivalents at the end of 2024 were approximately $377 million, down from $394 million at the end of 2023 [8] - The company generated a record cash flow from operations of $599 million in 2024, compared to $668 million in 2023 [8] - Lincoln Electric returned $426 million to shareholders through dividends and share repurchases during the year [8] - Debt to invested capital ratio increased to 48.7% from 45.8% year-over-year [8] Annual Results - For the full year 2024, adjusted earnings per share were $9.29, a decrease of 1.3% from $9.41 in 2023, but above the Zacks Consensus Estimate of $8.72 [9] - Total revenues for 2024 fell by 4.4% to $4.01 billion, surpassing the Zacks Consensus Estimate of $3.98 billion [9][10] - The company faced a 6.5% decline in organic sales, while acquisitions contributed positively with a 2.5% increase [10] Stock Performance - Lincoln Electric's shares have declined by 6.4% over the past year, contrasting with a 1.6% growth in the industry [11]