Linamar Corporation

Q2 2026 revenue was a record $3.1 billion, up 18.8% year over year. Normalized net earnings were $183 million, up 8.7%, and normalized EPS was $3.08, up 9.6%. Gross margin was not stated on the call. By segment, Mobility sales rose 20.5% to $2.4 billion and normalized operating earnings rose 28.6% to $194 million; Industrial sales rose 13.8% to $783.5 million and normalized operating earnings fell 23.8% to $78.7 million. Free cash flow was nearly $240 million, or $236.5 million according to the CFO, and cash on hand was $1.3 billion at June 30. Full-year 2026 outlook was unchanged: double-digit sales growth, growth in normalized EPS, a modest reduction in normalized net margins due mainly to amended 232 tariffs, CapEx up versus prior year but below the normal range as a percent of sales, and strongly positive free cash flow. For Q3, management expects Mobility sales and normalized earnings to grow in the double digits with margins roughly flat year over year and within the normal range; Industrial sales should grow but normalized operating earnings are expected to decline by double digits and margins to remain below the typical 14% to 18% range. Consolidated Q3 guidance is for double-digit sales growth, growth in normalized earnings, modest margin contraction and positive free cash flow.

Jim Jarrell framed the quarter as proof that Linamar’s “grit” strategy is working: diversified execution, disciplined operations and acquisitions are producing record sales, record Mobility earnings and strong cash flow despite uneven demand and trade uncertainty. He said the company is actively mitigating tariffs with practical actions that do not require major capital or restructuring, and emphasized that Linamar enters 2027 with momentum, a strong launch pipeline and expectations for continued topline growth, earnings improvement and margin expansion. His tone was confident and opportunistic, especially around Skyjack, new business wins and expansion into defense and robotics.

Dale Schneider highlighted the financial strength of the quarter: Mobility sales of $2.4 billion, Industrial sales of $783.5 million, free cash flow of $236.5 million, cash of $1.3 billion and liquidity of $2 billion. He noted net debt-to-EBITDA improved to 0.52x from 1.02x a year ago, with $725.2 million of available credit, and said Linamar returned over $92 million to shareholders through buybacks, bringing total cash returned since November 2024 to $192 million. On capital allocation, he pointed to the 10% dividend increase from $0.29 to $0.32 per share and said CapEx should rise from last year but remain below the normal range as a percent of sales.

Analysts focused on Skyjack demand, tariff exposure, industrial margins, acquisition opportunities and the strength of new business wins. Management said Skyjack backlog and order intake are both about double last year’s level, utilization is improving and the company has capacity and inventory to meet demand, though supply chain remains a watch point. On tariffs, they reiterated the impact is localized within Industrial and especially tied to 232 metal-derivative rules, while Mobility is not affected; they also said Q2 should be the peak dollar impact and that mitigation efforts are ongoing but not yet fully reflected in guidance. Management also explained that new Canadian and U.S. Mobility wins are being driven by North American onshoring from Asia and Europe, not by a need to reshore from Canada.