Linde did it again, beating earnings estimates and providing solid, if conservative guidance. This is why you own the company, which makes and supplies industrial gases — it just performs, quarter to quarter, regardless of the backdrop. Revenue for the first quarter ended March 31 increased slightly over 8% versus the year-ago period, coming in at $8.78 billion, ahead of the LSEG-compiled analysts’ consensus estimate of $8.58 billion. Adjusted earnings per share rose more than 9% year over year to $4.33, also outpacing the $4.26 expected, according to LSEG. Linde Why we own it: The industrial gas supplier and engineering firm has a stellar track record of consistent earnings growth. Its exposure to a wide range of industries, such as health care and electronics, and geographies — paired with excellent executive leadership and disciplined capital management — has been a recipe for steady success that should continue. Competitors: Air Liquide and Air Products and Chemicals Most recent buy : Dec. 18, 2024 Initiated : Feb. 18, 2021 Bottom line “A fantastic set of numbers,” Jim Cramer said on CNBC Friday. “They have helium. They have oxygen. They do a lot of the gases for semiconductors. So, it’s like this secret, quiet semiconductor, data center play. I love them.” The praise is certainly warranted, as Linde’s top- and bottom-line beats were driven by year-over-year sales growth across all of its end markets and key operating regions. And the data center isn’t the only exciting growth opportunity for the industrial gas company. In the consumer market, health care sales rose 1%, while food and beverage sales increased 5%, and electronics gained 10%. In the more cyclical industrial end market, manufacturing sales rose 5%, with half of the increase from aerospace activity in the United States, primarily supporting space vehicle production, testing, and launch, as “this end use continues to see strong double-digit percent growth,” CFO Matt White said on the conference call with investors. The team plans to isolate aerospace end-market sales once they consistently exceed 5% of global sales. In addition, both the chemicals and energy and metals and mining units posted 3% sales growth. By geographic region, sales increased by 10% in the Americas, 11% in the Asia Pacific, and 7% in Europe, the Middle East, and Africa. Linde is exactly the type of name you want to own when energy prices are ripping to the upside. Reason being, as the company notes in its annual report, the bulk of its business is conducted through long-term contracts that allow it to pass through changes in energy and feedstock costs to customers, resulting in more stable cash flows. LIN 1Y mountain Linde 1-year return Although the company’s operating profit margin contracted slightly, robust sales growth led to year-over-year operating profit growth, beating the consensus Street estimate. Moreover, profit margins tend not to tell the full story when it comes to Linde due to…
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