Lincoln Electric third-quarter net income rises to $144.3 million on sales growth

Lincoln Electric Holdings, Inc. (LECO) reported third-quarter 2026 net income of $144.3 million, or $2.63 per diluted share, up 17.7% from $122.6 million a year earlier, a regulatory filing showed on Tuesday.

Excluding special items, adjusted diluted earnings per share were $2.98, up 21% from $2.47. Adjusted net income was $163.6 million, compared with $137.2 million a year earlier.

Net sales rose 15.1% to $1,221.3 million. The company said organic sales grew 14.5%, with a 0.5% benefit from acquisitions and a 0.1% favorable effect from foreign exchange.

Here's how the company did:

• Diluted EPS: $2.63 vs. $2.21 a year earlier
• Adjusted EPS: $2.98 vs. $2.47 a year earlier
• Net sales: $1,221.3 million vs. $1,061.2 million a year earlier
• Operating income: $211.4 million, or 17.3% of sales, vs. $176.7 million, or 16.6%
• Adjusted operating income: $220.0 million, or 18.0% of sales, vs. $184.6 million, or 17.4%

Operating income rose to $211.4 million, or 17.3% of sales, from $176.7 million, or 16.6%. Excluding special items, the operating margin was 18.0%, against 17.4% a year earlier.

Gross profit was $425.0 million, or 34.8% of sales, compared with 36.7% a year earlier. Cost of goods sold rose 18.5% to $796.3 million.

Selling, general and administrative expenses were $205.8 million, or 16.9% of sales, down from $206.8 million, or 19.5%. Rationalization and asset impairment net charges were $7.9 million, up from $5.8 million, and relate primarily to rationalization plans in Americas Welding and International Welding.

The effective tax rate was 27.8%, up from 26.1%. The company recognized about $13.0 million of income tax expense in the quarter tied to foreign earnings that may be repatriated.

“We achieved strong third quarter results led by higher volumes, an increase in our adjusted operating income margin, and record adjusted earnings per share,” said Steven B. Hedlund, Chairman and Chief Executive Officer. “Our performance underscores the agility of our global team who are focused on supporting customers, diligently managing inflationary headwinds, and accelerating RISE strategy initiatives and investments to optimize long-term value for all our stakeholders.”

Americas Welding net sales rose 15.8% to $801.3 million from $691.8 million. Its adjusted EBIT margin was 20.1%, up from 18.2%.

International Welding net sales rose 3.3% to $226.9 million from $219.6 million. Its adjusted EBIT margin fell to 10.3% from 11.3%.

The Harris Products Group net sales rose 28.9% to $193.1 million from $149.8 million. Its adjusted EBIT margin was 17.3%, against 18.3% a year earlier.

For the nine months ended Sept. 30, net sales rose 12.9% to $3,562.4 million from $3,154.3 million. Net income was $439.2 million, or $7.97 per diluted share, against $6.86 a year earlier.

Adjusted diluted EPS for the nine months was $8.41, compared with $7.22. Operating income was $618.2 million, or 17.4% of sales, up from $533.7 million, or 16.9%.

Net cash from operating activities was $215.8 million in the quarter, down from $236.7 million. Free cash flow fell to $174.5 million from $205.1 million, and cash conversion, a non-GAAP measure, was 107% against 149%.

For the nine months, operating cash flow was $571.7 million and free cash flow was $459.9 million, compared with $482.2 million a year earlier. Cash conversion was 99%, down from 119%.

The company returned $143 million to shareholders in the quarter through dividends and share repurchases. Treasury share purchases totaled $99.4 million in the quarter, and cash dividends paid were $43.2 million.

For the nine months, purchases of treasury shares totaled $232.2 million and cash dividends paid were $130.7 million.

Total debt was $1.15 billion at Sept. 30, down from $1.29 billion at Dec. 31, 2025. Total debt to invested capital was 42.5%, from 46.8%. Short-term debt, which stood at $143.8 million at year-end, was nil at Sept. 30. Cash and cash equivalents were $283.2 million.

The board declared a quarterly cash dividend of $0.87 per share, or $3.48 annualized, a 10.1% increase from the prior quarterly dividend. The dividend is payable Jan. 15, 2027, to shareholders of record as of Dec. 31, 2026.

Interest expense, net, was $11.3 million, down from $13.6 million. Diluted weighted average shares were 54.9 million, compared with 55.6 million.

The release does not include updated full-year guidance or headcount figures.