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Lincoln Electric reported Q3 FY2026 revenue of $1.2 billion, up 15.1% from a year earlier and 3.97% above the consensus. Its adjusted earnings per share of $2.98 exceeded the $2.81 consensus, while diluted earnings per share rose to $2.63 from $2.21.
The company’s filing attributed sales growth to organic gains, acquisitions and foreign exchange. It said higher volumes and pricing supported organic sales, with improved industrial demand lifting Americas Welding and The Harris Products Group. International Welding faced slow industrial activity in Europe and disruption from the Middle East conflict.
Gross margin fell to 34.8% from 36.7%, which the filing attributed to higher input costs. Operating margin nevertheless rose to 17.3% from 16.6%. Lincoln Electric generated $179.1 million in free cash flow, compared with $206.2 million a year earlier.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $1.2 billion | $1.1 billion | 15.1% |
| Diluted EPS | $2.63 | $2.21 | 19.0% |
| Gross margin | 34.8% | 36.7% | −1.9 percentage points |
| Operating margin | 17.3% | 16.6% | 0.7 percentage points |
| Free cash flow | $179.1 million | $206.2 million | −13.1% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $2.98 | $2.81 | Beat by 6.05% |
| Revenue | $1.2 billion | $1.2 billion | Beat by 3.97% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Steven Hedlund said organic sales grew across all reportable segments, product areas and end markets. He said volume growth led the increase, while automation sales reached $232 million in the quarter as customers increased capital spending. Orders for automation and equipment lifted backlog, he said.
Hedlund said energy, logistics and electronic component costs continued to rise, with demand from AI data centers creating shortages of some raw materials. Asked about customer resistance to higher prices, he said channel partners and end users faced similar inflation and that the company was not getting substantial pushback. He described managing the pressures as “a constantly chasing target.”
Executive Gabriel Bruno said additional welding price increases should help achieve price-cost neutrality in Q4. Asked about gross-margin pressure, he said he expected gross margin to exceed its prior-year fourth-quarter level and incremental margins to reach the mid-twenties as the company progressed into Q4 and 2027.
On investment, Hedlund said the company had launched ExpertLink to help welding robots adapt to variations in parts. He said customers had historically needed tooling to force parts back into tolerance, making some automation uneconomical for high-mix, low-volume manufacturers. Asked how much the technology could expand the addressable market, he said the company would probably have a better perspective during 2027 as it observed customer deployments.
Bruno declined to assess competitive positioning when asked about equipment demand, but said orders for standard equipment had maintained their momentum into Q4. Asked about automotive investment, Hedlund said customers were spending on model changeovers, while capacity-driven investment had yet to pick up. Bruno added that incoming orders and backlog supported his expectation for high-single-digit automation growth over the next 12 months.
Guidance
Lincoln Electric raised its full-year net sales growth outlook to the low-teens percentage range. Bruno said the company also increased its 2026 capital expenditure range to $140 million to $150 million, from its initial assumption of $110 million to $130 million.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Operating margin, Non Gaap Incremental | FY2027 | Lincoln Electric expects mid-20% incremental margins as it progresses into FY2027. | — | — |
| Revenue, Automation Organic | FY2027 | Lincoln Electric expects high-single-digit automation growth in FY2027. | — | — |
| Revenue, Organic | FY2027 | Lincoln Electric expects mid- to high-single-digit organic sales growth in FY2027. | — | — |
| Operating margin, Automation | Q4 FY2026 | Lincoln Electric expects its automation business to maintain a low-double-digit EBIT margin in Q4 FY2026. | — | — |
| Capex | FY2026 | $140.0 million–$150.0 million | — | New |
| Operating margin, Non Gaap Incremental | Q4 FY2026 | Lincoln Electric expects a mid-20% incremental adjusted operating income margin in Q4 FY2026. | — | — |
| Gross margin | Q4 FY2026 | Lincoln Electric expects year-over-year gross margin expansion in Q4 FY2026. | — | — |
| Revenue | FY2026 | Lincoln Electric expects net sales growth in the low teens for FY2026. | — | — |
| Operating margin, Harris Non Gaap | Q4 FY2026 | 18.0% | — | New |
| Operating margin, International Welding Non Gaap | Q4 FY2026 | 12.0%–13.0% | — | New |
| Operating margin, Americas Welding Non Gaap | Q4 FY2026 | 20.0%–21.0% | — | New |
| Operating expenses, Corporate | Q4 FY2026 | $4.0 million–$5.0 million | — | New |
| Operating expenses, Sga | Q4 FY2026 | $210.0 million–$215.0 million | — | New |
| Revenue, Transportation | Q4 FY2026 | Lincoln Electric expects transportation sales growth to continue in Q4 FY2026. | — | — |