Lincoln Electric delivered third quarter results that exceeded Wall Street expectations, with robust revenue growth powered by strong demand in core segments and broad-based volume gains. Management emphasized that volume growth outpaced price increases for the first time in more than two years, particularly in the Americas and Asia Pacific regions. CEO Steven Hedlund credited the acceleration to "solid industrial production activity" and highlighted rising demand from data center projects and HVAC markets, while also noting ongoing challenges from higher energy and electronic component costs.
Is now the time to buy LECO? Find out in our full research report (it’s free for active Edge members).
Lincoln Electric (LECO) Q3 2026 highlights:
- Revenue $1.22 billion vs S&P analysts’ estimates of $1.18 billion (15.1% year-on-year growth, 3.9% beat)
- Adjusted EPS $2.98 vs S&P analysts’ estimates of $2.81 (6.2% beat)
- Adjusted operating income $220 million vs analyst estimates of $210.4 million (18% margin, 4.5% beat)
- Operating margin 17.3%, in line with the same quarter last year
- Organic revenue rose 14.5% year on year (miss)
- Market capitalization $15.2 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from Lincoln Electric’s Q3 earnings call
- Bryan Blair (Oppenheimer) asked about automation strategy momentum and backlog implications for 2027. CFO Gabriel Bruno said high single-digit organic automation growth is expected, underpinned by strong quoting activity and a growing backlog.
- Angel Castillo (Morgan Stanley) inquired about price elasticity and cost inflation into 2027. CEO Steven Hedlund explained that channel partners understand the inflation pressures, and price increases have been accepted with little pushback.
- Neil Burke (UBS) questioned the cyclical versus secular drivers of automation growth. Hedlund said current growth reflects a return to normalcy in automotive, while longer-term secular growth is expected from broader automation adoption and new technology.
- Mircea Dobre (Baird) asked about Harris Products Group pricing and margin sensitivity to silver prices. Bruno outlined that current pricing should support an 18% EBIT margin, with silver price anniversaries creating headwinds in 2027 but offset by data center-related demand in HVAC.
- Nathan Jones (Stifel) sought clarity on the impact of AI-powered cobots like ExpertLink on market expansion. Hedlund stated that these products could significantly increase automation adoption, especially among high-mix, low-volume manufacturers, but the adoption curve will be clearer in 2027.
Catalysts in upcoming quarters
Over the next few quarters, the StockStory team will watch (1) the pace of automation order conversion into revenue, especially as automotive and general industry projects move through the backlog, (2) the effectiveness of new product launches such as ExpertLink in expanding market reach, and (3) Lincoln Electric’s ability to manage margin pressures from persistent input cost inflation. The impact of data center activity on both Harris Products and overall equipment demand will also be closely monitored.
Lincoln Electric currently trades at $280.36, up from $258.65 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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