Linde (LIN 0.80%), a leading industrial gases company, revealed its fourth-quarter results on Feb. 6. While it exceeded bottom-line estimates by reporting earnings per share (EPS) of $3.97 against the $3.94 that analysts forecast, it fell short on revenue, posting $8.28 billion compared to the expected $8.42 billion.
| Metric | Q4 2024 | Q4 2024 Analysts' Estimate | Q4 2023 | % Change |
|---|---|---|---|---|
| EPS | $3.97 | $3.94 | $3.57 | 11.2% |
| Revenue | $8.28 billion | $8.42 billion | $8.30 billion | 0.2% |
| Adjusted operating profit | $2.48 billion | N/A | $2.27 billion | 9.3% |
| Free cash flow | $1.56 billion | N/A | $1.58 billion | (1.1%) |
Source: Analysts' estimates for the quarter provided by FactSet.
An Overview of Linde’s Business
Linde is the world’s largest industrial gas company, offering a comprehensive range of gases used in diverse industries. Its core business revolves around atmospheric gases like oxygen and nitrogen, and process gases such as carbon dioxide and hydrogen. These are vital in sectors including healthcare, chemicals, manufacturing, and electronics. The company is also a pioneer in innovative gas technologies, which enhance its service delivery.
In recent times, Linde has focused on the clean energy sector and long-term customer agreements. It has been strengthening its technological edge, as evidenced by its developments in hydrogen solutions and advanced gas processing techniques. Its vast market reach and proprietary technologies have been key to its success.
NASDAQ: LIN
Key Data Points
Quarterly Highlights and Strategic Developments
The fourth quarter results highlighted Linde’s capability to manage costs effectively, as its adjusted operating profit margin rose 2.5 percentage points to 29.9%.
Sales in the Americas grew by 1%, fueled by sectors including manufacturing, food, and electronics. The Asia-Pacific region experienced a 2% sales hike due to growth in the electronics sector. However, in the Europe/Middle East/Africa region, sales dropped by 2%, which the company attributed to reduced manufacturing volumes. Foreign currency fluctuations negatively influenced these outcomes.
Linde remains proactive in clean energy, having signed a substantial $2 billion contract with chemical giant Dow. This partnership reflects the company’s commitment to growing through strategic alliances. Additionally, its project backlog -- now over $10 billion -- points to significant future earnings growth prospects.
Linde returned $1.99 billion to its shareholders through dividends and stock repurchases during the quarter.
Outlook and Future Considerations
Linde has projected its 2025 adjusted diluted EPS will land between $16.15 and $16.55, indicating anticipated growth of 8% to 11% when excluding foreign currency impacts. Such guidance reflects Linde's confidence in its ability to navigate expected macroeconomic challenges while maintaining its strategic focus on technological advancements and energy solutions.
Investors should focus on Linde's endeavors in clean energy projects and its ability to secure long-term contracts. With its commitment to innovation and strategic market position, Linde is well positioned to leverage its assets for consistent growth.
