Overview
Since the Report + 0.4%
Revenue grew 9.2% year over year, EPS beat the estimate by 1.5%; the stock fell 1.8% in its first reaction.
- SalesQ3
- $9.40B
- ▲ 9.2% YoY · Beat Estimate by 2.4%
- EPSAdjusted
- $4.59
- Estimate $4.52 · Beat by 1.5%
Verdict
HOLDLinde beat estimates with record sales and earnings per share, and nudged its full-year outlook higher. The stock still fell 1.8% intraday; fourth-quarter guidance sits slightly below expectations and signals slower earnings growth. The next thing to watch is when the Lincare restructuring starts to show up in profit.
Close on Report DayOct 29
$499.17▼ 1.8%Report-Day Move
- Market Cap(Today)
- ≈ $231 B
- 1Y Return(At Report)
- + 16%
- P/E(At Today's Price · $17.62 · Trailing 12M)
- 28.4
- PEG(Company Guidance 2026)
- 3.31
- Net Margin(Trailing 12M)
- 20.4%
Earnings Summary
In 30 Seconds- Sales of $9.40 billion beat expectations by 2.4%, and adjusted earnings per share of $4.59 beat by 1.5%.
- Fourth-quarter guidance is $4.40–4.50; the midpoint is 1.3% below expectations, and earnings growth slows to 5–7%.
- The stock fell 1.8% intraday on the slowdown signal and continued weakness at Lincare.
The Numbers
Adjusted Operating Margin
29.4%
▼ 0.3 Pts · Flat Ex Pass-Through
GAAP EPS
$3.66
▼ 11% · $425M Restructuring Charge
Free Cash Flow
$1.78B
▲ 6.3% YoY · Operating Cash Flow $3.17B
Stock Reaction
▼ 1.8%
Intraday 12:39 ET; Update This Evening
Quarterly Revenue ($ Billion)
8.62
Q3 25 · $8.62 B
8.76
Q4 25 · $8.76 B · QoQ + 1.7%
8.78
Q1 26 · $8.78 B · QoQ + 0.2%
9.29
Q2 26 · $9.29 B · QoQ + 5.8%
9.40
Q3 26 · $9.40 B · QoQ + 1.2% · YoY + 9.2%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
Q4 2026 Company Guidance
- Q4 26 Adjusted EPS4.4 – 4.5 $4.4 $4.5 $4.4 – 4.5 $
Midpoint $4.45 · Market Expectation $4.511.3% Below Estimate ▼
- Q4 26 EPS Growth5% – 7%5%7%
▲ 9% in Q3Slowdown of 3.0 Pts ▼
- 2026 Adjusted EPS17.82 – 17.92 $17.82 $17.92 $17.82 – 17.92 $
Midpoint $17.87 · Prior $17.70–17.90 · Market Expectation $17.86Raised 0.4% ▲
- 2026 EPS Growth8% – 9%8%9%
6–7% Excluding FX · 2% FX TailwindUnchanged
- 2026 Capital Expenditures5.5 – 6.0 billion5.5 billion6.0 billion
Prior Range $5.5–6.0BUnchanged
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±19% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Americas$3.60 BShare 38.3%▲ 10.7% YoY
- Europe, Middle East and Africa$2.33 BShare 24.7%▲ 6.8% YoY
- Asia Pacific$1.95 BShare 20.7%▲ 12.0% YoY
- Other$944 MShare 10.0%▲ 2.2% YoY
Includes the U.S. homecare business Lincare
- Engineering$582 MShare 6.2%▲ 12.1% YoY
Key Metrics
Operating Cash Flow
$3.17 B
▲ 7.5% YoYPress Release
Free Cash Flow
$1.78 B
▲ 6.3% YoYPress Release
Capital Expenditures
$1.39 B
▲ 9.1% YoYPress Release
Cash Returned to Shareholders
$1.69 B
Press Release
Adjusted Return on Capital
23.5%
Press Release
Engineering Order Intake
$499 M
Press Release
Adjusted Net Debt
$22.8 B
Press Release
Shares are computed over the segment total: $9.40 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“Linde's financial performance continued to improve in the third quarter, with record sales of $9.4 billion and record EPS of $4.59, alongside strong operating cash flow of $3.2 billion. Customer proposal activity remains robust, particularly across electronics, supporting our confidence in continued backlog growth.”
- Lincare Restructuring
- Double-digit Electronics Growth
- Staying Ahead of Inflation on Price
Summary and Review
Summary
Linde reported third-quarter sales of $9.40 billion. That is 9.2% higher year over year and 2.4% above the market expectation. Underlying sales grew 5%, with price adding 3% and volume 2%. Adjusted earnings per share came in at $4.59, beating the estimate by 1.5%. The revenue gate is open, while the earnings gate is in line. The guidance gate is also in line: the fourth-quarter midpoint is 1.3% below expectations, and the full year matches. GAAP profit fell 11% because of a restructuring charge.
The stock fell 1.8% intraday. The market did not read this report as a record story; it read it as a slowdown story. The company expects 5–7% earnings growth in the fourth quarter, below the 9% it just delivered. Management cited currency, seasonality and the reversal of a one-time boost to equity income. It also assumes no meaningful near-term improvement at Lincare. The stock is up 15.5% over the past year and trades 9.6% below the average analyst target.
Score 60, verdict hold. The quarter was good, but only one of three gates is open. The core gas business is healthy: the Americas operating margin rose to 35.1%, and electronics sales grew 15%. On the other hand, profit in the Other segment, which now includes Lincare, fell 32% year over year. The total margin was only flat excluding cost pass-through. This was a solid but limited quarter. A slightly higher full-year outlook and strong cash flow keep the score in the upper half of its band.
Full Review
The record came from price, not volume.
The 9.2% sales increase breaks down clearly. Underlying sales grew 5%: 3% from price and 2% from volume. The rest came from currency, cost pass-through, small acquisitions and engineering sales. Pricing in the Americas rose 6%. On the earnings call, CFO Matt White said part of that was recovery of higher energy and distribution costs in North America. The company does not expect that cost pressure to persist into the fourth quarter. So the price jump in the Americas is a recovery, not a lasting trend. Among end markets, electronics was the strongest, with sales up 15% year over year. Healthcare grew only 2%, held back by Lincare. Electronics growth came from semiconductor customers in Asia Pacific and the U.S. A large share of projects in this area is still under construction. That points to growth spreading into the coming years.
Lincare now has its own line.
The company changed its segment structure this quarter. Its U.S. homecare business, Lincare, moved from the Americas segment into Other. Prior periods were recast on the new basis. Operating profit in the Other segment was $42 million. A year earlier it was $62 million, a 32% decline. The segment margin fell to 4.4%. Of the $425 million restructuring charge, $200 million was severance. The $183 million non-cash portion relates mostly to the homecare business. The strategic review we listed last quarter as an upcoming event is still under way. Lincare now reports directly to the CFO. There is no decision yet on a sale or separation. Sales in the Other segment were $944 million, up only 2.2% year over year. Its share of total sales fell from 10.7% to 10.0%. The segment is small, but its margin erosion hits group profit directly.
The gas regions carry the margin.
The adjusted operating margin was 29.4%. It was 29.7% a year ago and 29.5% last quarter. The annual decline is 0.3 points, and flat excluding cost pass-through. The regions diverge. The Americas margin rose 0.5 points to 35.1%. In Europe, the Middle East and Africa, the margin fell 0.8 points to 35.1%. Asia Pacific dropped 0.7 points to 27.4%. The company attributes most of those two declines to cost pass-through. The engineering margin fell 1.1 points to 18.4%. Combined operating profit of the three gas regions was $2.61 billion. That is up 9.1%, ahead of the 8.0% increase for the group. Americas profit alone rose 12.4%. In short, the gas regions are holding their margins while the non-gas businesses pull the total down.
Strong cash, cautious guidance.
Operating cash flow was $3.17 billion, up 7.5% year over year. Capital expenditures were $1.39 billion. Free cash flow rose 6.3% to $1.78 billion. The company returned $1.69 billion to shareholders through dividends and buybacks. Last quarter's guidance of $4.45–4.55 was beaten at $4.59. The full-year range moved from $17.70–17.90 to $17.82–17.92. Part of that increase comes from currency; the assumed currency tailwind rose from 1% to 2%. Fourth-quarter guidance is $4.40–4.50. The midpoint is $4.45, against a market expectation of $4.51. Management assumes no improvement in the economy. Adjusted net debt was $22.75 billion, down $360 million from last quarter. Nine-month capital expenditures rose 9.7% to $4.17 billion.
Next quarter, watch a single line.
The open question in this report is not the core gas business but Lincare. In the fourth-quarter report in February 2027, look at operating profit in the Other segment. This quarter it was $42 million. If profit returns toward $60 million, the restructuring is working. Margin pressure would then ease, and double-digit earnings growth would be back on the table. If profit stays below $42 million, the problem is deepening. In that case, a sale becomes the more likely outcome of the strategic review. The second test is the 2027 guidance. If the company guides earnings per share growth below 8%, today's slowdown stops being a single quarter. The third signal is pricing in the Americas. If it falls well below 6%, the region's margin support weakens too.
Looking Ahead
Strengths and Risks
6 Strengths · 6 RisksStrengths
6- Sales hit a record $9.40 billion and beat the market expectation by 2.4%.
- Adjusted earnings per share reached a record $4.59, above the company's own $4.45–4.55 guidance.
- Electronics sales grew 15% year over year, making it the fastest-growing end market.
- The Americas operating margin rose 0.5 points year over year to 35.1%.
- Operating cash flow rose 7.5% to $3.17 billion, and free cash flow reached $1.78 billion.
- The full-year guidance midpoint was raised from $17.80 to $17.87.
Risks
6- Operating profit in the Other segment, which includes Lincare, fell 32% year over year to $42 million.
- Fourth-quarter guidance implies 5–7% earnings growth, below the 9% pace of the third quarter.
- The Asia Pacific margin fell 0.7 points and the Europe margin fell 0.8 points year over year.
- A $425 million restructuring charge cut GAAP earnings per share by 11% year over year.
- Part of the full-year guidance increase relies on a currency tailwind that weakens if the dollar strengthens.
- Energy costs are rising, and price recovery in merchant gases can lag by several months.
What to Watch
4- February 2027Fourth-quarter earnings and 2027 guidance; the company expects $4.40–4.50 in earnings per share.
- Coming quarters — the strategic review of Lincare continues; a decision on a sale or separation is pending.
- First half of 2027Hydrogen units at the Woodside ammonia project start up; full capacity extends into 2028.
- Second half of 2027Restructuring savings are expected to reach their full run rate.
Upcoming Earnings
To Understand This