Linde has released its third quarter 2019 results today with CEO Steve Angel commenting, “The Linde team delivered another quarter of strong financial results.”
Linde plc reported second-quarter income from continuing operations of $728m.
Excluding Linde AG purchase accounting impacts and other charges, adjusted pro forma income from continuing operations was $1.05bn, up 24% versus prior year and 5% sequentially.
Linde’s sales for the third quarter were $7bn. Pro forma sales were $6.9bn, 1% higher than the prior year.
Excluding unfavourable currency translation effects, sales increased 4% driven by volume and price each growing 2%.
Volume growth was evenly split between base business and project start-ups while price improved across all geographic segments.
Sales sequentially decreased 3% driven primarily by lower engineering sales, unfavourable currency and lower cost pass-through.
Third quarter operating profit of $1.87bn increased $867m versus the second quarter, primarily driven by higher net income and improved working capital.
During the quarter, Linde invested $959m in capital expenditures, mostly for new production plants under long-term contracts, and returned $1.15bn to shareholders through dividends and stock repurchases.
Commenting on the financial results, CEO Steve Angel said, “The Linde team delivered another quarter of strong financial results with operating margins expanding 260 basis points, operating cash flow reached $1.9bn and earnings per share growing 26%.”
“For the remainder of the year we anticipate continued softening of the global economy, however, we are raising our full-year EPS guidance given the opportunities we see to continue to improve the quality of business.”
In the Americas, sales of $2.77bn were 5% higher versus the prior year quarter and flat sequentially.
Compared to the second quarter of 2019, price increased 1%, offset by negative cost pass-through.
Operating profit of $671m was 24.2% of sales.
Sales in APAC (Asia Pacific) of $1.46bn decreased 5% from the prior year and 2% sequentially. Excluding negative currency and cost pass-through, sales were flat versus the prior year and up 1% sequentially.
Pricing increased 1% versus the prior year but was offset by negative volumes driven by an overall weaker economy and customer turnarounds.
Sequentially, price improved 1% while volume was flat as project start-ups was offset by weaker base volumes.
Operating profit of $308m was 21.1% of sales.
EMA (Europe, Middle East & Africa) sales of $1.63bn were down 4% versus the prior year and 2% sequentially. Excluding unfavourable currency, sales increased 1% versus the prior year and were flat sequentially.
Compared with the second quarter of 2019, higher pricing of 1% was offset by weaker volumes primarily due to a slowing manufacturing end-market.
Operating profit of $335m was 20.5% of sales.
Sales for Linde Engineering were $641m and operating profit was $120m. Operating profit grew 74% compared to the prior year and 21% sequentially primarily due to strong project execution, cost management and favourable timing of project completion.