Linde reports $2.1bn profits for Q3; highlights ‘strong’ results

Linde has highlighted an operating profit of $2.1bn in its third quarter (Q3) 2023 results, an increase of 15% compared with Q3 2022.

The company also reported sales at $8.2bn, down 7% year-on-year (YoY), while underlying sales were up by 3%.

Linde reported a net income of $1.5bn and diluted earnings per share (EPS) of $3.19%, up 23% and 26%.

Excluding Linde purchase accounting impacts and other charged, adjusted net income was $1.78bn, up 15% versus prior year, with adjusted EPS reaching $3.63, 17% above prior year.

Q3 operating cash flow of $2.5bn decreased 4% versus prior year, driven primarily by lower engineering payments.

After capital expenditures of $948m, free cash flow was $1.57bn. During the quarter, the company returned $1.78bn to shareholders through dividends and stock repurchase, net of issuances.

“Linde employees delivered another quarter of strong results, with EPS growth of 17%, ROC of 25.6%, OCF of $2.5bn and operating margin expansion of 550 basis points to 28.3%,” said Sanjiv Lamba, CEO of Linde.

“This performance is driven by our relentless culture to optimise the base business while increasing network density and deploying capital to high-quality growth initiatives.”

Americas sales of $3.63bn were down 2% versus prior year. Compared with Q3 2022, underlying sales increased 3% driven by 5% higher pricing, partially offset by 2% lower volumes.

Underlying sales growth was seen mainly in the healthcare, food & beverage and chemicals & energy end markets.

Operating profit of $1.07bn was 29.6% of sales, 320 basis points above prior year and 90 basis points higher when excluding the effects of cost pass-through.

APAC (Asia Pacific) sales of $1.64bn were 1% lower versus prior year. Compared to Q3 2022, underlying sales grew 3% driven by 3% price attainment and stable volumes.

Underlying sales growth was seen mainly in the chemicals & energy end markets, including project start-ups and the healthcare and manufacturing end markets.

Operating profit of $459m was 28% of sales, 220 basis point above prior year.

EMEA (Europe, Middle East & Africa) sales of $2.1bn were down 1% versus prior year. Compared with Q3 2022, underlying sales grew 2%, driven by 6% higher pricing partially offset by 4% lower volumes.

Operating profit of $634m was 30.1% of sales, 820 basis points above prior year and 600 basis points higher when excluding the effects of cost pass-through.

Linde Engineering sales were $467m, up 44% versus prior year, and operating profit was $116m pr 24.8% of sales.

Order intake for the quarter was $633m and third-party sale of equipment backlog was $3.6bn.

Outlook

For the fourth quarter of 2023, Linde expects adjusted diluted EPS in the range of $3.38 to $3.48, up 7% to 10% versus prior-year quarter.

This guidance assumes a currency tailwind of 1% year-over-year and a 2% headwind sequentially.

For the full year 2023, the company expects adjusted EPS to be in the range of $14 to $14.10, up 14% to 15% versus prior year.

Full-year capital expenditures are expected to be in the range of $3.5bn to $4bn to support growth and maintenance requirements including the $4.5bn contractual sale of gas project backlog.