Lincoln Electric (LECO) Misses Q3 EPS by 1c; Updates on Venezuela

Lincoln Electric (NASDAQ: LECO) reported Q3 EPS of $0.89, $0.01 worse than the analyst estimate of $0.90. Revenue for the quarter came in at $645.2 million versus the consensus estimate of $657.56 million.

Venezuela Update

The Company is now utilizing the SIMADI rate as of September 30, 2015 for remeasurement purposes, as it believes that this rate more appropriately approximates the rates used to transact business in its Venezuelan operations. Fourth quarter 2015 Venezuela results will be presented using the SIMADI rate. The SIMADI rate is an auction-based exchange rate, which was 199.4 bolivars to the U.S. dollar as of September 30, 2015, compared to the SICAD I rate exchange rate, which was 13.5 bolivars to the U.S. dollar on that date.

As a result of this change, the Company incurred a pre-tax and after-tax charge of $26.5 million in the third quarter of 2015. This represents a lower of cost or market inventory adjustment of $22.2 million recorded in costs of goods sold and a remeasurement loss of $4.3 million recorded in selling general and administrative expenses. Third quarter 2015 Venezuela financial performance included Net sales of $34.7 million and Adjusted net income of $0.2 million. Third quarter 2014 Venezuela financial performance included Net sales of $12.8 million and Adjusted net loss of $1.2 million.

The results of our Venezuelan operations could be negatively impacted by additional currency remeasurements or devaluations, increased costs due to changes in raw material sourcing, the potential inability to obtain required production materials resulting in interruptions to operations or other actions by the Venezuelan government that could limit or cause cessation of operations.

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

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