The Gory Details on Lincoln Electric Holdings' Double Fumble (LECO)

The Gory Details on Lincoln Electric Holdings' Double Fumble

Lincoln Electric Holdings (Nasdaq: LECO ) reported earnings on July 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Lincoln Electric Holdings missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share increased significantly.

Margins increased across the board.

Revenue details
Lincoln Electric Holdings reported revenue of $744.0 million. The seven analysts polled by S&P Capital IQ expected to see revenue of $800.1 million on the same basis. GAAP reported sales were 6.4% higher than the prior-year quarter's $699.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.81. The eight earnings estimates compiled by S&P Capital IQ anticipated $0.86 per share. GAAP EPS of $0.79 for Q2 were 16% higher than the prior-year quarter's $0.68 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 30.2%, 220 basis points better than the prior-year quarter. Operating margin was 13.1%, 170 basis points better than the prior-year quarter. Net margin was 8.9%, 70 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $776.6 million. On the bottom line, the average EPS estimate is $0.79.

Next year's average estimate for revenue is $3.10 billion. The average EPS estimate is $3.23.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 361 members out of 370 rating the stock outperform, and nine members rating it underperform. Among 114 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 113 give Lincoln Electric Holdings a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lincoln Electric Holdings is outperform, with an average price target of $56.42.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Report this Comment On July 31, 2012, at 1:46 PM, tweenthelines wrote:

Analysts missing estimates? Seems to me there's a joke in there somewhere? Perhaps its a good name for rock band.