Third quarter 2026
Filed Oct 27, 2026LINCOLN ELECTRIC REPORTS THIRD QUARTER 2026 RESULTS
Third-quarter net sales increased 15.1%, adjusted operating income margin increased to 18.0% from 17.4%, and adjusted diluted EPS increased to $2.98 from $2.47. Results were led by volume growth, while the Company returned $143 million to shareholders through dividends and share repurchases.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended September 30GAAP | $1.22B | – | 15.1% |
| Organic sales, three months ended September 30non-GAAP | 14.5% increase | – | 14.5% increase |
| Cost of goods sold, three months ended September 30GAAP | $796.3M | – | (18.5)% |
| Gross profit, three months ended September 30GAAP | $425.0M | – | 9.2% |
| Gross margin, three months ended September 30GAAP | 34.8% | – | – |
| Selling, general & administrative expenses, three months ended September 30GAAP | $205.8M | – | 0.5% |
| Rationalization and asset impairment net charges, three months ended September 30GAAP | $7.85M | – | (34.7)% |
| Operating income, three months ended September 30GAAP | $211.4M | – | 19.7% |
| Operating income margin, three months ended September 30GAAP | 17.3% | – | – |
| Adjusted operating income, three months ended September 30non-GAAP | $220.0M | – | – |
| Adjusted operating income margin, three months ended September 30non-GAAP | 18.0% | – | – |
| Interest expense, net, three months ended September 30GAAP | $11.35M | – | 16.9% |
| Income before income taxes, three months ended September 30GAAP | $200.0M | – | 20.5% |
| Income taxes, three months ended September 30GAAP | $55.69M | – | (28.4)% |
| Effective tax rate, three months ended September 30GAAP | 27.8% | – | – |
| Net income, three months ended September 30GAAP | $144.3M | – | 17.7% |
| Adjusted net income, three months ended September 30non-GAAP | $163.6M | – | – |
| Diluted earnings per share, three months ended September 30GAAP | $2.63 | – | 19.0% |
| Adjusted diluted earnings per share, three months ended September 30non-GAAP | $2.98 | – | – |
| Net cash provided by operating activities, three months ended September 30GAAP | $215.8M | – | – |
| Capital expenditures, three months ended September 30GAAP | −$41.22M | – | – |
| Free cash flow, three months ended September 30non-GAAP | $174.5M | – | – |
| Cash conversion, three months ended September 30non-GAAP | 107% | – | – |
| Net sales, nine months ended September 30GAAP | $3.56B | – | 12.9% |
| Gross profit, nine months ended September 30GAAP | $1.27B | – | 9.7% |
| Gross margin, nine months ended September 30GAAP | 35.7% | – | – |
| Operating income, nine months ended September 30GAAP | $618.2M | – | 15.8% |
| Operating income margin, nine months ended September 30GAAP | 17.4% | – | – |
| Adjusted operating income, nine months ended September 30non-GAAP | $633.1M | – | – |
| Adjusted operating income margin, nine months ended September 30non-GAAP | 17.8% | – | – |
| Net income, nine months ended September 30GAAP | $439.2M | – | 14.2% |
| Adjusted net income, nine months ended September 30non-GAAP | $463.3M | – | – |
| Diluted earnings per share, nine months ended September 30GAAP | $7.97 | – | 16.2% |
| Adjusted diluted earnings per share, nine months ended September 30non-GAAP | $8.41 | – | – |
| Net cash provided by operating activities, nine months ended September 30GAAP | $571.7M | – | – |
| Free cash flow, nine months ended September 30non-GAAP | $459.9M | – | – |
| Cash conversion, nine months ended September 30non-GAAP | 99% | – | – |
| Return on invested capital, twelve months ended September 30GAAP | 22.7% | – | – |
| Adjusted return on invested capital, twelve months ended September 30non-GAAP | 23.9% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Americas Welding, three months ended September 30, 2026Volume $91,589; price $16,390; foreign exchange $1,491. | $801.3M | – | 15.8% |
| International Welding, three months ended September 30, 2026Volume $(3,039); price $5,287; acquisitions $5,071; foreign exchange $(44). | $226.9M | – | 3.3% |
| The Harris Products Group, three months ended September 30, 2026Volume $4,460; price $38,469; foreign exchange $380. | $193.1M | – | 28.9% |
| Americas Welding, nine months ended September 30, 2026Volume $138,658; price $91,550; foreign exchange $10,088. | $2.28B | – | 11.8% |
| International Welding, nine months ended September 30, 2026Volume $(35,601); price $9,360; acquisitions $37,058; foreign exchange $14,900. | $697.2M | – | 3.8% |
| The Harris Products Group, nine months ended September 30, 2026Volume $(9,898); price $147,705; foreign exchange $4,270. | $583.2M | – | 32.2% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Returned $143 million to shareholders through dividends and share repurchases.
- Purchase of shares for treasury: $(99,397) for the three months ended September 30, 2026, compared with $(52,664).
- Cash dividends paid to shareholders: $(43,223) for the three months ended September 30, 2026, compared with $(41,572).
- Quarterly cash dividend declared: $0.87 per share, or $3.48 per share on an annualized basis.
- The declared quarterly cash dividend is payable January 15, 2027 to shareholders of record as of December 31, 2026.
What drove it
- Third-quarter consolidated sales growth reflected an 8.8% volume contribution, a 5.7% price contribution, a 0.5% acquisition contribution and a 0.1% foreign exchange contribution.
- Third-quarter adjusted operating income margin was 18.0%, compared with 17.4% in the prior-year period.
- Americas Welding generated $801,264 of net sales, with 13.2% volume growth and 2.4% price growth.
- The Harris Products Group generated $193,113 of net sales, with a 25.7% price contribution.
- Management cited higher volumes, adjusted operating income margin expansion, support for customers, management of inflationary headwinds, and RISE strategy initiatives and investments.
Concerns
- Third-quarter gross margin was 34.8%, compared with 36.7% in the prior-year period, while cost of goods sold increased 18.5%.
- International Welding third-quarter volume was $(3,039), or (1.4)%.
- Third-quarter cash conversion was 107%, compared with 149% in the prior-year period; free cash flow was $174,538, compared with $205,051.
- Third-quarter effective tax rate was 27.8%, compared with 26.1%; the Company recognized approximately $12,977 of related income tax expense associated with certain foreign earnings that may be repatriated.
- Rationalization and asset impairment net charges were $7,853 in the third quarter, compared with $5,831.
What to watch
- Volume performance in International Welding, which was (1.4)% in the third quarter and (5.3)% for the nine-month period.
- Gross-profit performance following third-quarter gross margin of 34.8% versus 36.7% in the prior-year period.
- Cash conversion and capital expenditures, which were 107% and $(41,219), respectively, in the third quarter.
- The declared quarterly cash dividend of $0.87 per share, a 10.1% increase from the prior quarterly cash dividend.
- Rationalization and asset impairment net charges within Americas Welding and International Welding.
Balance sheet and cash flow
- Cash and cash equivalents were $283,237 at September 30, 2026, compared with $308,789 at December 31, 2025.
- Total debt was $1,149,969 at September 30, 2026, compared with $1,294,008 at December 31, 2025.
- Long-term debt, less current portion, was $1,149,969 at September 30, 2026, compared with $1,150,228 at December 31, 2025.
- Total equity was $1,554,721 at September 30, 2026, compared with $1,469,794 at December 31, 2025.
- Total debt / invested capital was 42.5% at September 30, 2026, compared with 46.8% at December 31, 2025.
- Average operating working capital to Net sales was 16.6% at September 30, 2026, compared with 17.9% at December 31, 2025.
- Accounts receivable, net, was $603,307 at September 30, 2026, compared with $538,791 at December 31, 2025.
- Inventories were $699,380 at September 30, 2026, compared with $633,364 at December 31, 2025.
Analysis
Lincoln Electric reported a strong third quarter, with net sales of $1,221,281, up 15.1%, driven by an 8.8% volume contribution, 5.7% price contribution, 0.5% from acquisitions and 0.1% from foreign exchange. Organic sales increased 14.5%. Americas Welding generated 15.8% sales growth and The Harris Products Group generated 28.9% growth, while International Welding grew 3.3% despite a (1.4)% volume contribution.
Profitability improved below gross profit. Gross margin was 34.8%, compared with 36.7% in the prior-year period, as cost of goods sold increased 18.5%. However, selling, general & administrative expenses were $205,802 compared with $206,823, and operating income margin increased to 17.3% from 16.6%. Adjusted operating income margin increased to 18.0% from 17.4%, while adjusted diluted EPS increased to $2.98 from $2.47.
Cash generation remained substantial but trailed the prior-year period. Net cash provided by operating activities was $215,757, compared with $236,687, and free cash flow was $174,538, compared with $205,051. Cash conversion was 107%, compared with 149%. The balance sheet showed cash and cash equivalents of $283,237 and total debt of $1,149,969 at September 30, 2026, with total debt / invested capital of 42.5% versus 46.8% at December 31, 2025.
Capital allocation included $(99,397) of treasury-share purchases and $(43,223) of cash dividends paid in the quarter, totaling the stated $143 million returned to shareholders. The Board declared a quarterly cash dividend of $0.87 per share, or $3.48 per share on an annualized basis, a 10.1% increase from the prior quarterly cash dividend. The filing provides no forward financial guidance, leaving volume trends, gross-margin performance, International Welding demand, cash conversion and ongoing rationalization charges as the principal reported items to monitor.
Management, verbatim
We achieved strong third quarter results led by higher volumes, an increase in our adjusted operating income margin, and record adjusted earnings per share.
Steven B. Hedlund, Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Forward financial guidance was not provided.
- Previous-release outlook was not provided.
- Prior-quarter comparisons for reported third-quarter and nine-month metrics were not provided.
- Segment-level net income was not provided.
- Segment-level operating income was not provided. The filing reports segment EBIT and adjusted EBIT instead.
- Non-GAAP gross margin was not provided.
AlphAI 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.