Linde plc (NASDAQ:LIN) reported its fourth-quarter and full-year 2025 financial results, delivering a performance that narrowly missed analyst expectations on the bottom line while providing a forward-looking outlook that aligns with Wall Street's projections for the coming year. The market's initial reaction was muted, with shares trading slightly lower in pre-market activity.
Quarterly Results vs. Estimates
The industrial gases giant reported fourth-quarter sales of $8.76 billion, which slightly exceeded the analyst consensus estimate of approximately $8.73 billion. This represents a 6% increase compared to the prior-year period.
On the profitability front, the company's adjusted earnings per share (EPS) came in at $4.20. This figure was just below the analyst estimate of $4.22. The reported GAAP diluted EPS was $3.26, down 9% year-over-year, primarily due to specific purchase accounting impacts and restructuring charges.
Key quarterly highlights include:
- Sales Growth: Underlying sales increased 3%, driven by a 2% contribution from pricing and a 1% increase in volumes.
- Profitability: Adjusted operating profit rose 4% to $2.59 billion, though the adjusted operating profit margin contracted slightly by 40 basis points to 29.5%.
- Cash Generation: The company demonstrated strong cash flow, with operating cash flow up 8% to $3.03 billion. Free cash flow was $1.57 billion.
Full-Year 2025 Performance and Market Reaction
For the full year 2025, Linde reported sales of $34.0 billion, a 3% increase over 2024. Adjusted diluted EPS for the year was $16.46, marking a 6% growth from the prior year. The company highlighted a resilient operational model, with adjusted operating profit exceeding $10 billion and the profit margin expanding to 29.8%.
The stock's performance in the wake of the report has been subdued. Shares were down approximately 0.7% in pre-market trading following the release. This minor negative move likely reflects the slight miss on the quarterly EPS estimate, even as sales met expectations and the company maintained its disciplined financial execution. Over the past month, the stock had appreciated roughly 8.3%, indicating some positive sentiment heading into earnings that may have led to a "sell the news" reaction.
Forward Guidance and Analyst Expectations
Management provided specific guidance for the upcoming year, which offers a clear point of comparison with existing analyst forecasts. For the full year 2026, Linde expects adjusted diluted EPS in the range of $17.40 to $17.90. This represents projected growth of 6% to 9% over the 2025 figure of $16.46.
This outlook appears to be in line with the broader market expectations embedded in analyst estimates. The company's guidance midpoint of approximately $17.65 is consistent with a growth trajectory that analysts had been modeling.
For the first quarter of 2026, the company anticipates adjusted EPS between $4.20 and $4.30, projecting growth of 6% to 9% over Q1 2025. Capital expenditures for the full year 2026 are forecasted to be between $5.0 billion and $5.5 billion, aimed at supporting growth and a substantial project backlog.
Segment Performance and Strategic Position
The earnings release detailed a mixed performance across Linde's geographic segments in Q4:
- Americas: Sales rose 8%, with strong pricing and volume growth in electronics.
- APAC: Sales increased 3%, driven by higher volumes.
- EMEA: Sales were up 6%, though underlying sales decreased 2% due to lower volumes in the chemicals and energy sector.
- Engineering: Sales declined 2%, but the segment maintains a $2.7 billion order backlog.
CEO Sanjiv Lamba emphasized the company's "resilient performance" and strong execution, pointing to a record operating profit, cash flow, and project backlog each surpassing $10 billion. He stated the company is well-positioned to capture high-quality projects in 2026 and continue creating shareholder value despite macroeconomic uncertainties.
For a detailed breakdown of historical earnings and future analyst estimates, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
