LINCOLN ELECTRIC HOLDINGS INC (LECO): Results of Operations and Financial Condition
LINCOLN ELECTRIC HOLDINGS INC (LECO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Investor Relations: Amanda Butler (216) 383-2534 Amanda_Butler@lincolnelectric.com LINCOLN ELECTRIC REPORTS SECOND QUARTER 2026 RESULTS Second Quarter 2026 Highlights ◾ Net sales increase 12.0% to a record $1,220 million; organic sales increase 10.1% ◾ Op
How this was made
The 30-second read
Why it matters
The filing updates the market with GAAP and adjusted earnings, margin performance, and cash-flow conversion, which are key inputs for valuation and near-term expectations.
Market read
Company-specific earnings and cash-generation metrics were disclosed on the filing date, creating a direct catalyst for trading around industrial demand and margin durability.
What to watch
The release highlights special items and non-GAAP adjustments; traders may scrutinize whether adjusted margins and cash conversion can persist into the second half.
LINCOLN ELECTRIC REPORTS SECOND QUARTER 2026 RESULTS
Second-quarter net sales increased 12.0% to a record $1,220 million, operating income margin expanded to 18.1% from 17.6%, diluted EPS rose to $2.88 from $2.56, and cash flows from operations were $254 million with 138% cash conversion.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $ 1,219,663 (In thousands) | – | 12.0 % |
| Cost of goods soldGAAP | 770,667 (In thousands) | – | (12.8) % |
| Gross profitGAAP | 448,996 (In thousands); 36.8 % of sales | – | 10.7 % |
| Selling, general & administrative expensesGAAP | 224,871 (In thousands); 18.4 % of sales | – | (6.6) % |
| Rationalization and asset impairment net chargesGAAP | 3,481 (In thousands); 0.3 % of sales | – | (36.9) % |
| Operating incomeGAAP | $ 220,644 (In thousands); 18.1 % of sales | – | 14.8 % |
| Adjusted operating incomenon-GAAP | $224.1 million; 18.4% of sales | – | – |
| Interest expense, netGAAP | 12,521 (In thousands); 1.0 % of sales | – | 0.8 % |
| Other (expense) incomeGAAP | (241) (In thousands) | – | (106.0) % |
| Income before income taxesGAAP | 207,882 (In thousands); 17.0 % of sales | – | 13.3 % |
| Income taxesGAAP | 49,363 (In thousands); 4.0 % of sales | – | (22.9) % |
| Effective tax rateGAAP | 23.7 % | – | (1.8) % |
| Net incomeGAAP | $ 158,519 (In thousands); 13.0 % of sales | – | 10.5 % |
| Adjusted net incomenon-GAAP | $161.2 million | – | – |
| Basic earnings per shareGAAP | $ 2.90 | – | 12.4 % |
| Diluted earnings per shareGAAP | $ 2.88 | – | 12.5 % |
| Adjusted diluted earnings per sharenon-GAAP | $2.93 adjusted EPS | – | – |
| Weighted average shares (basic)GAAP | 54,662 (In thousands) | – | – |
| Weighted average shares (diluted)GAAP | 55,102 (In thousands) | – | – |
| Cash flows from operationsGAAP | $254 million | – | – |
| Cash conversionnon-GAAP | 138% | – | – |
| Six-month net salesGAAP | $ 2,341,097 (In thousands) | – | 11.9 % |
| Six-month gross profitGAAP | 848,128 (In thousands); 36.2 % of sales | – | 10.0 % |
| Six-month operating incomeGAAP | 406,802 (In thousands); 17.4 % of sales | – | 13.9 % |
| Six-month adjusted operating incomenon-GAAP | $413.1 million; 17.6% of sales | – | – |
| Six-month effective tax rateGAAP | 22.6 % | – | (0.4) % |
| Six-month net incomeGAAP | $ 294,901 (In thousands); 12.6 % of sales | – | 12.6 % |
| Six-month adjusted net incomenon-GAAP | $299.7 million | – | – |
| Six-month diluted earnings per shareGAAP | $ 5.34 | – | 14.6 % |
| Six-month adjusted diluted earnings per sharenon-GAAP | $5.43 EPS | – | – |
Capital returns
- Returned $120 million to shareholders through dividends and share repurchases.
What drove it
- Second-quarter sales increased 12.0% to $1,219.7 million, reflecting a 10.1% increase in organic sales, a 1.5% benefit from acquisitions and a 0.4% favorable foreign exchange.
- Six-month sales increased 11.9% to $2,341.1 million, primarily reflecting a 9.0% increase in organic sales, a 1.5% benefit from acquisitions, and 1.4% favorable foreign exchange.
- Management cited improved demand and capital spending in the Americas and Asia Pacific.
- Selling, general & administrative expenses were 18.4 % of second-quarter sales, compared with 19.4 % in the prior-year period.
- Second-quarter adjusted operating income margin was 18.4% compared with 17.9% in the prior-year period.
Concerns
- Second-quarter gross profit margin was 36.8 % of sales, compared with 37.3 % in the prior-year period.
- The second-quarter effective tax rate was 23.7 %, compared with 21.9 % in the prior-year period.
- Second-quarter rationalization and asset impairment net charges were 3,481 (In thousands), compared with 2,542 (In thousands) in the prior-year period.
- Other (expense) income was (241) (In thousands), compared with other income of 4,034 (In thousands) in the prior-year period.
- Cash and cash equivalents were $ 242,443 (In thousands) at June 30, 2026, compared with $ 308,789 (In thousands) at December 31, 2025.
What to watch
- Organic sales growth and the contributions from acquisitions and favorable foreign exchange.
- Demand and capital spending in the Americas and Asia Pacific.
- Gross-profit margin, which was 36.8 % of sales in the second quarter of 2026.
- The effective tax rate, which was 23.7 % in the second quarter of 2026.
- Rationalization and asset impairment net charges and other (expense) income.
- Cash flows from operations, cash conversion, and returns through dividends and share repurchases.
Balance sheet and cash flow
- Cash and cash equivalents: $ 242,443 (In thousands) as of June 30, 2026; $ 308,789 (In thousands) as of December 31, 2025.
- Accounts receivable, net: 586,348 (In thousands) as of June 30, 2026; 538,791 (In thousands) as of December 31, 2025.
- Inventories: 690,543 (In thousands) as of June 30, 2026; 633,364 (In thousands) as of December 31, 2025.
- Total current assets: 1,760,550 (In thousands) as of June 30, 2026; 1,739,512 (In thousands) as of December 31, 2025.
- Property, plant and equipment, net: 731,762 (In thousands) as of June 30, 2026; 702,762 (In thousands) as of December 31, 2025.
- Total assets: 3,813,310 (In thousands) as of June 30, 2026; 3,777,577 (In thousands) as of December 31, 2025.
- Trade accounts payable: 447,437 (In thousands) as of June 30, 2026; 364,934 (In thousands) as of December 31, 2025.
- Total current liabilities: 888,083 (In thousands) as of June 30, 2026; 956,691 (In thousands) as of December 31, 2025.
- Long-term debt, less current portion: 1,150,054 (In thousands) as of June 30, 2026; 1,150,228 (In thousands) as of December 31, 2025.
- Total equity: 1,554,180 (In thousands) as of June 30, 2026; 1,469,794 (In thousands) as of December 31, 2025.
- Average operating working capital to Net sales: 16.9 % as of June 30, 2026; 17.9 % as of December 31, 2025.
- Cash flows from operations were $254 million and cash conversion was 138%.
Analysis
Lincoln Electric reported record second-quarter net sales of $1,220 million, up 12.0%, with 10.1% organic sales growth supplemented by a 1.5% benefit from acquisitions and 0.4% favorable foreign exchange. Management attributed the period to improved demand and capital spending in the Americas and Asia Pacific. For the six months ended June 30, 2026, sales increased 11.9% to $2,341.1 million, including 9.0% organic growth, a 1.5% acquisition benefit, and 1.4% favorable foreign exchange.
Profitability improved below gross profit. Second-quarter operating income was $220.6 million, or 18.1% of sales, versus $192.1 million, or 17.6% of sales, in the prior-year period. Adjusted operating income was $224.1 million, or 18.4% of sales, compared with $195.1 million, or 17.9% of sales. Selling, general & administrative expenses fell to 18.4% of sales from 19.4%, while gross profit margin was 36.8% of sales versus 37.3%.
GAAP net income was $158.5 million, or $2.88 per diluted share, compared with $143.4 million, or $2.56 per diluted share. Excluding special items, adjusted net income was $161.2 million, or $2.93 adjusted EPS, versus $145.6 million, or $2.60 adjusted EPS. The period included special item after-tax net charges of $2.7 million, or $0.05 EPS. The effective tax rate was 23.7%, compared with 21.9% in the prior-year period.
Cash generation was a highlighted result, with cash flows from operations of $254 million and 138% cash conversion. The company returned $120 million to shareholders through dividends and share repurchases. At June 30, 2026, cash and cash equivalents were $242,443 (In thousands), long-term debt less current portion was 1,150,054 (In thousands), and average operating working capital to net sales was 16.9%.
The release did not provide forward financial guidance. The principal reported operating points for investors are the pace of organic sales growth, demand and capital spending in the Americas and Asia Pacific, the lower gross profit margin, the higher effective tax rate, and the level of rationalization and asset impairment net charges.
Management, verbatim
We achieved record second quarter results across key metrics including sales, operating income profitability, earnings, and cash generation.
Steven B. Hedlund, Chairman and Chief Executive Officer
We are encouraged by improved demand and capital spending in the Americas and Asia Pacific, and strong execution of our RISE Strategy initiatives positions us well to generate superior returns for our shareholders.
Steven B. Hedlund, Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Forward guidance for revenue, gross margin, operating expenses, tax rate, EPS, cash flow, or other metrics was not provided.
- Prior-quarter comparisons for reported income-statement metrics were not provided.
- Segment revenue, segment growth, and segment-level drivers were not provided.
- Free cash flow was not provided.
- Detailed dividends and share repurchases amounts were not provided.
- Second-quarter capital expenditures were not provided.
- A CFO commentary section was not provided.
- Six-month cost of goods sold, selling, general & administrative expenses, rationalization and asset impairment net charges, interest expense, other income, income before income taxes, income taxes, basic EPS, and weighted-average-share metrics are reported in the filing but are not separately listed in key_metrics.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K (Item 2.02) with an attached earnings release for Lincoln Electric’s second quarter 2026 results.
Ticker impact
Lincoln Electric reported Q2 2026 net sales up 12.0% to a record $1,220 million and adjusted EPS of $2.93, plus 138% cash conversion.
Likely positive bias for the stock on earnings-day sentiment, with follow-through dependent on whether investors focus on margin durability and cash generation.
The filing discloses multiple upside datapoints versus the prior year period: higher sales, higher operating income margin (18.1% vs 17.6%), higher adjusted EPS ($2.93 vs $2.60), and strong cash conversion (138%).
Market effects
Supports the view that industrial welding and fabrication equipment demand and pricing/mix are improving, at least for a high-quality margin operator.
Management cites improved demand and capital spending in the Americas and Asia Pacific, which may influence regional industrial read-through.
Record sales and margin expansion at a global manufacturer can modestly affect sentiment toward industrial capex and manufacturing maintenance cycles.
Counterpoint
Investors may discount the strength if they view the results as cyclical or driven by acquisitions and FX rather than sustainable organic demand.
Key entities
- issuerLincoln Electric Holdings, Inc.
Reported Q2 2026 record net sales, margin expansion, adjusted EPS, and strong cash conversion in an 8-K earnings release.
- executiveSteven B. Hedlund
Chairman and CEO quoted on improved demand and capital spending in the Americas and Asia Pacific and progress on the RISE Strategy.
