Linde Reports First-Quarter 2024 Results (Earnings Release Tables Attached)

Rhea-AI Summary

Linde plc (NASDAQ:LIN) reported first-quarter 2024 results with sales of $8.1 billion, down 1%, adjusted operating profit of $2.3 billion, up 6%, and adjusted EPS of $3.75, up 10%. The company expects full-year 2024 adjusted EPS to be in the range of $15.30 to $15.60, representing 8% to 10% growth year-over-year.

Positive

• Linde's adjusted operating profit increased by 6% to $2.3 billion, driven by higher price and productivity initiatives across all segments.

• The adjusted EPS grew by 10% to $3.75, demonstrating strong financial performance and growth.

• The company's full-year 2024 adjusted EPS guidance of $15.30 to $15.60 represents 8% to 10% growth year-over-year, showcasing positive outlook and confidence in future performance.

Negative

• Sales for the first quarter were down 1% to $8.1 billion, reflecting a slight decrease compared to the prior year.

• Operating cash flow increased by 2% to $1.954 million, which is a lower growth rate compared to other financial metrics like adjusted operating profit and EPS.

• The EMEA segment experienced a 4% decline in sales compared to the prior year, indicating challenges in that region.

Insights

Financial Analyst

Linde's first-quarter earnings showcase a mixed financial landscape, with a slight decrease in overall sales yet a commendable uptick in adjusted operating profit and margins. The 200 basis points improvement in adjusted operating profit margin to 28.9% is indicative of efficient cost management and successful productivity initiatives. Such margin expansions are critical in industrial sectors, signaling an ability to maintain profitability despite sales fluctuations. The $3.75 adjusted EPS, reflecting a 10% year-over-year increase, underscores Linde's ability to generate shareholder value, which is often a primary focus for investors.

From an investment perspective, the return of $1,694 million to shareholders through dividends and stock repurchases demonstrates a shareholder-friendly policy, which is typically viewed favorably in the market. However, it is important to consider the balance between rewarding shareholders and reinvesting in the business for sustainable growth. Moreover, the guidance for full-year 2024 suggests confidence, projecting a solid 8% to 10% growth in adjusted EPS, though such forward-looking statements should be taken with caution, given potential economic headwinds.

Market Research Analyst

Geographically, Linde's performance varied across regions, with the Americas and APAC (Asia Pacific) segments maintaining sales while expanding profit margins through higher pricing and volume growth in select end markets. Notably, the EMEA (Europe, Middle East & Africa) segment experienced a 4% sales decrease but countered it with a significant margin increase. This points to regional dynamics such as economic conditions and industrial demand that can influence Linde's performance differently across its markets.

The industrial gas sector is highly correlated with manufacturing and healthcare market performances and Linde's report of lowered volumes in these areas could be a red flag for potential challenges ahead. Investors should be cognizant of the fact that while Linde has a robust contractual sale of gas project backlog valued at $4.9 billion, which secures a revenue stream, the underlying volume trends in key markets could impact future performance.

Investment Advisor

Linde's capital expenditure guidance of $4.0 billion to $4.5 billion underscores their commitment to growth and maintenance. This level of capital investment can be a double-edged sword; on one hand, it supports future revenue streams and efficiencies, but on the other, it requires substantial cash outflows that could otherwise be used for additional shareholder returns or debt reduction. The planned expenditures should be monitored to ensure they yield the anticipated returns in terms of growth and operational enhancements.

The industrial gas market is known for its long-term contracts and stable cash flows, which could mitigate concerns about short-term volume declines. However, the potential for economic downturns to negatively affect industrial demand cannot be dismissed. Linde's spread across diverse markets and its project backlog may cushion the impact, but this is a variable investors should watch carefully to gauge the company's resilience.

First-Quarter Highlights

• Sales $8.1 billion, down 1%, underlying sales up 1%
• Operating profit $2.1 billion, adjusted operating profit $2.3 billion, up 6%
• Operating profit margin 25.9%; adjusted operating profit margin 28.9%, up 200 basis points
• EPS $3.35, up 9%; adjusted EPS $3.75, up 10% YoY
• Full-year 2024 adjusted EPS guidance of $15.30 - $15.60 representing 8% to 10% growth year-over-year

WOKING, UK / ACCESSWIRE / May 2, 2024 / Linde plc (NASDAQ:LIN) today reported first-quarter 2024 net income of $1,627 million and diluted earnings per share of $3.35, up 7% and 9% respectively. Excluding Linde AG purchase accounting impacts and other charges, adjusted net income was $1,821 million, up 8% versus prior year. Adjusted earnings per share was $3.75, 10% above prior year.

Linde's sales for the first quarter were $8,100 million, down 1% versus prior year. Compared to prior year, underlying sales increased 1% from 2% price attainment partially offset by 1% lower volumes largely driven by the manufacturing end market.

First-quarter operating profit was $2,095 million. Adjusted operating profit of $2,341 million was up 6% versus prior year led by higher price and continued productivity initiatives across all segments. Adjusted operating profit margin of 28.9% was 200 basis points above prior year and 130 basis points higher when excluding the effects of cost pass-through.

First-quarter operating cash flow of $1,954 million increased 2% versus prior year. After capital expenditures of $1,048 million, free cash flow was $906 million. During the quarter, the company returned $1,694 million to shareholders through dividends and stock repurchases, net of issuances.

Commenting on the financial results and business outlook, Chief Executive Officer Sanjiv Lamba said, "I'm proud of how the Linde team continues to deliver high-quality results despite economic headwinds. We had another strong quarter, growing EPS 10%, ROC to 25.6% and expanding operating margins 200 basis points, reaching 28.9%. These results demonstrate the resiliency of our integrated industrial gas model through optimizing our network density, all while developing high-quality growth opportunities."

Lamba continued, "Despite the uncertain economic environment, I remain confident in our ability to continue to create shareholder value through our proven operating model."

For the second quarter of 2024, Linde expects adjusted diluted earnings per share in the range of $3.70 to $3.80, up 4% to 6% versus prior-year quarter or 5% to 7% when excluding 1% of estimated currency headwind.

For the full year 2024, the company expects adjusted diluted earnings per share to be in the range of $15.30 to $15.60, up 8% to 10% versus prior year or 9% to 11% when excluding 1% of estimated currency headwind. Full-year capital expenditures are expected to be in the range of $4.0 billion to $4.5 billion to support growth and maintenance requirements including the $4.9 billion contractual sale of gas project backlog.

First-Quarter 2024 Results by Segment

Americas sales of $3,560 million were flat versus prior-year quarter. Compared with first quarter 2023, underlying sales increased 2% driven by 3% higher pricing partially offset by 1% lower volumes, primarily in the manufacturing and healthcare end markets. Operating profit of $1,088 million was 30.6% of sales, 170 basis points above prior year and 110 basis points higher when excluding the effects of cost pass-through.

APAC (Asia Pacific) sales of $1,591 million were flat versus prior year. Compared with first quarter 2023, underlying sales grew 4% driven by 1% price attainment and 3% volume growth, primarily in the chemicals and electronics end markets, including project start-ups. Operating profit of $447 million was 28.1% of sales, 160 basis points above prior year. Year over year cost pass-through was immaterial.

EMEA (Europe, Middle East & Africa) sales of $2,091 million were down 4% versus prior year. Compared with first quarter 2023, underlying sales grew 1%, driven by 3% higher pricing partially offset by 2% lower volumes, primarily in the manufacturing end market. Operating profit of $687 million was 32.9% of sales, 500 basis points above prior year and 340 basis points higher when excluding the effects of cost pass-through.

Linde Engineering sales were $539 million, flat versus prior year, and operating profit was $100 million or 18.6% of sales. Order intake for the quarter was $364 million and third-party sale of equipment backlog was $3.4 billion.

Earnings Call

A teleconference on Linde's first-quarter 2024 results is being held today at 9:00 am EDT.

Live conference call	US Toll-Free Dial-In Number: 1 888 770 7292 UK Toll-Free Dial-In Number: 0800 358 0970 Access code: 6877110
Live webcast (listen-only)	https://www.linde.com/investors/financial-reports

Materials to be used in the teleconference are also available on the website.

About Linde

Linde is a leading global industrial gases and engineering company with 2023 sales of $33 billion. We live our mission of making our world more productive every day by providing high-quality solutions, technologies and services which are making our customers more successful and helping to sustain, decarbonize and protect our planet.

The company serves a variety of end markets such as chemicals & energy, food & beverage, electronics, healthcare, manufacturing, metals and mining. Linde's industrial gases and technologies are used in countless applications including production of clean hydrogen and carbon capture systems critical to the energy transition, life-saving medical oxygen and high-purity & specialty gases for electronics. Linde also delivers state-of-the-art gas processing solutions to support customer expansion, efficiency improvements and emissions reductions.

For more information about the company and its products and services, please visit www.linde.com

Adjusted amounts, free cash flow and return on capital are non-GAAP measures. See the attachments (Earnings release tables: https://eqs-cockpit.com/c/fncls.ssp?u=df0acc47b7d0dc252f22faa88842b3a5) for a summary of non-GAAP reconciliations and calculations for adjusted amounts.

Attachments: Summary Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information and Appendix: Non-GAAP Measures and Reconciliations.

*Note: We are providing adjusted earnings per share ("EPS") guidance for 2024. This is a non-GAAP financial measure that represents diluted earnings per share from continuing operations (a GAAP measure) but excludes the impact of certain items that we believe are not representative of our underlying business performance, such as cost reduction and other charges, the impact of potential divestitures or other potentially significant items. Given the uncertainty of timing and magnitude of such items, we cannot provide a reconciliation of the differences between the non-GAAP adjusted EPS guidance and the corresponding GAAP EPS measure without unreasonable effort.

Forward-looking Statements

This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. They are based on management's reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties. These risks and uncertainties include, without limitation: the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances, including trade conflicts and tariffs; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics, pandemics such as COVID-19 and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates; the cost and outcomes of investigations, litigation and regulatory proceedings; the impact of potential unusual or non-recurring items; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business. These risks and uncertainties may cause future results or circumstances to differ materially from adjusted projections, estimates or other forward-looking statements.

Linde plc assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances. The above listed risks and uncertainties are further described in Item 1A. Risk Factors in Linde plc's Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 28, 2024 which should be reviewed carefully. Please consider Linde plc's forward-looking statements in light of those risks.

Contacts:
Investor Relations Juan Pelaez Phone: +1 203 837 2213 Email: juan.pelaez@linde.com	Media Relations Anna Davies Phone: +44 1483 244705 Email: anna.davies@linde.com

Additional features:

File: Q1 2024 Earnings Release Tables

SOURCE: Linde plc

View the original press release on accesswire.com

FAQ

What were Linde's first-quarter 2024 sales figures?

Linde's sales for the first quarter of 2024 were $8.1 billion, down 1% compared to the prior year.

How much did Linde's adjusted operating profit increase by in the first quarter of 2024?

Linde's adjusted operating profit increased by 6% to $2.3 billion in the first quarter of 2024.

What was Linde's adjusted EPS for the first quarter of 2024?

Linde's adjusted EPS for the first quarter of 2024 was $3.75, up 10% from the prior year.

What is Linde's full-year 2024 adjusted EPS guidance range?

Linde's full-year 2024 adjusted EPS guidance is in the range of $15.30 to $15.60, representing 8% to 10% growth year-over-year.