Lincoln Electric (LECO) Reports In-Line Q1 EPS, Revenues Miss

Lincoln Electric (NASDAQ: LECO) reported Q1 EPS of $1.00, in-line with the analyst estimate of $1.00. Revenue for the quarter came in at $701.99 million versus the consensus estimate of $712.1 million.

First Quarter 2020 Highlights

• Operating as an “essential business” (1) in substantially all locations to serve customers
• Implemented best practice hygiene and safety measures to protect employees
• Net sales declined 7.5%; Organic sales declined 9.5%
• Operating income margin declined 90 basis points to 11.5%; Adjusted operating income margin declined 40 basis points to 12.6%
• Q1 EPS decreases 18.8% to $0.91; Adjusted EPS decreases 14.5% to $1.00
• $140 million returned to shareholders through dividends and share repurchases
• Solid balance sheet with 1.85 Total debt/EBITDA ratio, $163 million in cash and $314 million in available credit under existing borrowing facilities

“We executed well in an increasingly challenging environment,” said Christopher L. Mapes, Chairman, President and Chief Executive Officer. “Our priority has been to protect employees’ health and safety as we operated as an ‘essential business’ across substantially all of our locations in the quarter.”

“Global demand trends weakened significantly in April, declining in the low 40% range versus the prior year,” stated Mapes. “To mitigate the impact of lower demand, we expanded our cost reduction initiatives and expect these new measures, combined with earlier actions, to now generate $40 to $45 million in realized cost savings in 2020. While we expect demand to trough in the second quarter, our strong investment-grade balance sheet profile, liquidity, and cash flow generation give me tremendous confidence in our ability to successfully navigate this challenging period and generate long-term value for our shareholders.”

For earnings history and earnings-related data on Lincoln Electric (LECO) click here.

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