Lincoln Electric Holdings, Inc. LECO reported fourth-quarter 2023 adjusted earnings of $2.45 per share, beating the Zacks Consensus Estimate of $2.19. This marked a 26.3% year-over-year increase, driven by robust demand, effective cost management and operational enhancements. On Feb 15, the company's shares rose 8% in response to the stronger-than-anticipated results.

Including one-time items, the bottom line was $2.70 per share compared with $1.87 in the year-ago quarter.

Total revenues rose 13.7% year over year to a record $1.06 billion. The top line surpassed the Zacks Consensus Estimate of $1.03 billion. The improvement in revenues can be attributed to 2.6% growth in organic sales and a 9.8% benefit from acquisitions. Foreign currency exchange had a favorable impact of 1.3%.

Lincoln Electric Holdings, Inc. Price, Consensus and EPS Surprise

Lincoln Electric Holdings, Inc. price-consensus-eps-surprise-chart | Lincoln Electric Holdings, Inc. Quote

Costs and Margins

The cost of goods sold rose 10.4% year over year to $688 million. The gross profit increased 20.5% to $371 million. The gross margin was 35.1% compared with the year-ago quarter's 33.1%, delivering a 200-basis point expansion.

Selling, general and administrative expenses increased 15.1% year over year to $189 million. Adjusted operating profit increased 24% year over year to $182 million in the quarter. LECO delivered a record adjusted operating margin of 17.2% for the quarter. The company had reported an operating margin of 15.8% in the year-ago quarter.

Segment Performances

Americas Welding: The segment's total sales increased 14.4% to $690 million from $603 million in the year-earlier quarter. Adjusted operating income totaled $129.5 million compared with $114 million in the year-ago quarter.

International Welding: This segment's revenues rose 22% year over year to $304 million in the reported quarter. The segment reported an adjusted operating profit of $43 million compared with the year-ago quarter's $23 million.

The Harris Products Group: The segment's fourth-quarter total sales amounted to around $114 million, reflecting a year-over-year dip of 2%. Adjusted operating profit was $15 million compared with the year-ago quarter's $12 million.

Cash Flow & Balance Sheet

Lincoln Electric had cash and cash equivalents of around $394 million at the end of 2023 compared with $197 million at 2022 end. The company generated a record $668 million in cash flow from operations in 2023, up 74% year over year. LECO returned $347 million to shareholders via dividends and share repurchases through the quarter.

The company's debt to invested capital was 45.8% at the end of 2023 compared with 53.8% at the end of 2022.