On August 2, 2024, Linde PLC (LIN, Financial) released its 8-K filing detailing the company's financial results for the second quarter of 2024. Linde, the largest industrial gas supplier in the world, operates in over 100 countries and serves a variety of end markets including chemicals, manufacturing, healthcare, and steelmaking.
Performance Highlights
Linde PLC reported second-quarter sales of $8.3 billion, a 1% increase from the previous year. The company's operating profit stood at $2.2 billion, with an adjusted operating profit of $2.4 billion, marking a 6% increase year-over-year. The operating profit margin was 26.4%, while the adjusted operating profit margin improved to 29.3%, up 140 basis points from the prior year.
Despite these gains, Linde's earnings per share (EPS) of $3.44 fell short of the analyst estimate of $3.64. However, the adjusted EPS of $3.85 showed an 8% increase year-over-year. The company's net income for the quarter was $1,663 million, up 6% from the previous year, with adjusted net income at $1,859 million, also up 6%.
Segment Performance
Breaking down the performance by segments:
| Segment | Sales | Operating Profit | Operating Profit Margin |
|---|---|---|---|
| Americas | $3,655 million | $1,159 million | 31.7% |
| APAC (Asia Pacific) | $1,657 million | $474 million | 28.6% |
| EMEA (Europe, Middle East & Africa) | $2,091 million | $704 million | 33.7% |
| Linde Engineering | $544 million | $96 million | 17.6% |
Financial Achievements and Challenges
Linde's financial achievements include a robust adjusted operating profit margin of 29.3% and a significant return on capital (ROC) of 25.7%. These metrics are crucial for value investors as they indicate the company's efficiency in generating profits from its capital investments.
However, the company faced challenges such as flat volume growth and a 10% decrease in operating cash flow to $1,929 million, primarily due to engineering project prepayment timing. Free cash flow for the quarter was $796 million after capital expenditures of $1,133 million. Despite these challenges, Linde returned $2,100 million to shareholders through dividends and stock repurchases.
Commentary and Outlook
"Despite the challenging macro, the Linde team again delivered high-quality results, growing EPS 8%, increasing ROC to 25.7% and expanding operating margins 140 basis points, reaching 29.3%. This exemplifies our ability to continuously grow the integrated industrial gas model while developing and winning high-quality growth opportunities," said Chief Executive Officer Sanjiv Lamba.
Looking ahead, Linde expects adjusted diluted EPS for the third quarter of 2024 to be in the range of $3.82 to $3.92, representing a 5% to 8% increase year-over-year. For the full year 2024, the company projects adjusted diluted EPS to be between $15.40 and $15.60, up 8% to 10% from the previous year.
For more detailed financial information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Linde PLC for further details.
