Linde plc

Linde reported Q2 sales of $9.3 billion, up 9% year over year and 6% sequentially. EPS was $4.50, up 10% year over year. Operating margin was 29.5%, down 60 bps year over year, or down 30 bps excluding cost pass-through. Excluding FX, acquisitions, engineering, and cost pass-through, underlying sales rose 4% year over year, with volume and price both contributing; sequential underlying sales also rose 4%. Management guided Q3 EPS to $4.45 to $4.55, or 6% to 8% growth, and raised full-year EPS guidance to $17.70 to $17.90, or 8% to 9% growth excluding a 1% FX tailwind assumption. The company said it expects more than 20 project startups in the remainder of the year, representing about $1.3 billion in investments, and expects the sale-of-gas backlog to end the year with an “8 handle.”

Sanjiv Lamba framed the quarter as strong on growth and backlog, but explicitly said he was not satisfied with margin performance. He highlighted record sales and EPS, a record $8.1 billion backlog, and healthy project pipeline momentum, especially in electronics and manufacturing. His tone was confident but pragmatic: he emphasized long-term growth, while also saying the U.S. homecare business remains under pressure and is still being evaluated for strategic fit.

Matthew White emphasized that the quarter’s top-line growth was broad-based, with 4% underlying sales growth driven by both volume and price, and said price increased 2% year over year across geographies. He pointed to 29.5% operating margin, noting the 30 bps ex-pass-through decline was largely due to U.S. homecare and lower-margin equipment sales in APAC, and said many of these headwinds should be temporary and recover in the coming quarter. On cash, he said operating cash flow showed moderate year-over-year growth, available cash flow remained healthy, and year-to-date capital deployed was $6 billion, split evenly between business investments and shareholder returns.

Analysts pressed on the U.S. homecare drag, asking how large the headwind is and whether the business is profitable; management said the Americas business excluding Lincare would have been up 20 bps on margin ex-pass-through, and later said the headwind is roughly 30% higher than the analyst’s estimate, with active operational fixes underway and strategic options being evaluated. Questions also focused on electronics and where the backlog is concentrated; management said the pipeline is strongest in the U.S., but also healthy in Taiwan, Korea, and China. Later questions covered helium and Middle East disruption, with management saying helium pricing has improved but dislocation costs are still dilutive to margin, and that normalization may take into early next year if disruptions ease.