Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 30, 2026 · Beat 6 of last 7 quarters
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Lincoln Electric's volume inflection and record backlog signal a broad-based industrial recovery in the Americas, which could support continued investment in automation and capital equipment. Strength in energy and data center-related demand, along with rising automation quoting for new vehicle platforms, may drive incremental demand for welding and automation solutions across the AI infrastructure supply chain.
Consolidated sales rose 12% to $1.220 billion, with organic growth of 10% driven by volume inflection after 9 quarters of compression. Americas Welding led with 11% sales growth, including 7% volume growth and low double-digit equipment volume growth. International Welding volumes declined 5% on EMEA softness, while Harris grew 27% on 34% price. Adjusted operating income margin improved 50 bps to 18.4%, and adjusted EPS rose 13% to $2.93. Cash flow from operations hit a record $254 million, and the company returned $120 million to shareholders.
Management raised full-year net sales growth assumption to low double-digit percent, with organic sales now expected high single-digit to low double-digit percent (roughly 1/3 volume, 2/3 price). They expect adjusted operating income margin to improve versus prior year with mid-20% incremental margins in the back half. Americas Welding margin is guided to 19-20% EBIT for the remainder of the year, while International Welding is expected to stay in the 10-11% range due to EMEA weakness and Middle East conflict headwinds of $6-7M per quarter. Harris is expected to moderate to 18-19% EBIT in the second half. Management expressed confidence in the durability of the Americas industrial recovery, citing 6 consecutive months of favorable macro data, strong order rates, and record backlog.
“Second quarter marked a solid inflection to volume growth in the business after 9 quarters of compression, led by strength in the Americas Welding segment.”
on Volume inflection
“We are encouraged by 6 consecutive months of favorable macro data in the Americas, strong incoming order rates and a record backlog position, which gives us confidence in the durability of an industrial recovery in the Americas.”
on Demand outlook
“We are now raising our full year net sales growth assumption to a low double-digit percent rate with seasonal progression through the balance of the year.”
on Guidance raise
On price/cost, we moved from neutral for the full year to neutral in the second half. Is that a change because it would have implied positive price/cost in the second half?
Gabe Bruno confirmed the change, noting they ended Q2 at a 10 bps headwind but expect to execute pricing to achieve neutral price/cost in the back half.
Can you quantify the tariff refund and the $10M LIFO headwind for the full year?
Steve Hedlund explained most tariff impact was Section 232, and refunds were incorporated into pricing. Gabe Bruno added the $10M LIFO estimate is based on inflationary pressures through June, and they've incorporated it into guidance.
Can you provide an update on automation expectations in the transportation sector for the back half?
Gabe Bruno noted significant quoting activity and record backlog, with more acceleration in automotive engagement for 2027+ programs. They expect automation to push high single-digit to low double-digit year-over-year sales improvement.