Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 31, 2026 · Beat 7 of last 7 quarters
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Linde's record $8.1B backlog, driven by a $1B US electronics win and an $800M Taiwan JV investment, underscores the accelerating AI-driven semiconductor fab buildout. The company's ability to secure new electronics projects while maintaining an '8 handle' backlog despite $1.3B of startups signals sustained demand for ultra-high-purity gases and on-site infrastructure. This positions Linde as a critical enabler of advanced node capacity expansion in the US and Asia.
Linde delivered record sales and EPS in Q2, with sales up 9% YoY to $9.3B and EPS of $4.50 up 10%. The sale-of-gas backlog rose $1B to a record $8.1B on a new US electronics win, with an additional ~$800M in Taiwan JV electronics investments not included in the backlog. Operating margins declined 60 bps YoY to 29.5%, pressured by the US homecare business and lower-margin equipment sales, though management noted underlying gases margins were up ex-homecare. Electronics was the fastest-growing end market at 18% YoY, while manufacturing growth was led by aerospace and US data center-related construction.
Management raised the low end of full-year 2026 EPS guidance by $0.10 to $17.70-$17.90 (8-9% growth), leaving the top unchanged and maintaining a neutral macro assumption. Q3 guidance is $4.45-$4.55 (6-8% growth), with sequential improvement expected as actions to address the US homecare margin drag take effect. The company expects to start up over 20 backlog projects (~$1.3B of investment) for the remainder of the year, yet still finish the year with a sale-of-gas backlog in the '8 handle' range, supported by a robust electronics pipeline across the US, Taiwan, Korea, and China. Helium normalization is not expected until early next year, and management remains confident in its 8-12% EPS algorithm for 2027 without needing macro improvement.
“While these results demonstrate the strength of our core business and the future growth prospects, we are not satisfied with our margin performance for this quarter.”
on Margin performance
“We have a series of actions underway. And I fully expect sequential improvement into the third quarter.”
on Margin recovery
“While base volumes showed some recovery in the second quarter, we would like a few more quarters under our belt before incorporating this trend into future guides.”
on Guidance conservatism
Can you give a sense of how much of a headwind the US homecare business has been, and is it currently profitable?
Sanjiv noted that ex-US homecare, Americas margins would be up 20 bps, and that the gases business is performing well. He acknowledged the homecare business is a drag and that aggressive actions are underway to improve it.
Did you change guidance assumptions for helium, and is the flat sequential Americas pricing due to hard goods mix?
Matthew said guidance was left intact, so no material change to helium assumptions. He noted helium price is improving but dislocation costs are dilutive to margins. On Americas pricing, he said year-over-year pricing is tracking expectations, with Lincare a slight drag.
Is the homecare penalty ~$100M this year, and have you decided on divesting the business?
Matthew said the penalty is roughly 30% higher than $100M. Sanjiv said the business faces persistent headwinds from labor inflation and reimbursement changes, and that management is evaluating strategic options while implementing operational improvements.