Lincoln Electric is doing so well it has increased its dividends and plans to spend $300 million in cash this year buying back shares, in effect returning the excess cash to shareholders.
View full sizeLincoln Electric Holdings builds the high-tech welding equipment used to make wind turbine towers. Lincoln is reporting increases in sales and net income. EUCLID, Ohio --- Sales are up at Lincoln Electric, but net income fell on a bookkeeping technicality for the three months ending Sept. 30.
The global manufacturer of welding equipment and supplies, including digitally controlled welding machinery, Thursday reported third quarter net income of $45.7 million, or 57 cents per share -- down from the net income of $66 million, or 80 cents per share in the third quarter of 2013.
But the results include a "rationalization and asset impairment charge" of $29.1 million related to the company's decision to dispose of some of its Asia Pacific factories.
Adjusted net income for the quarter was $74.9 million, or $0.94 per share, compared to adjusted net income of $71.1 million, or $0.86 per share, in the third quarter of 2013 period, the company said.
Sales increased 3.5 percent to $715.8 million in the third quarter 2014 versus $691.9 million in the comparable 2013 period.
"We are pleased with the underlying quality of our earnings this quarter, which were driven by strong top-line growth and margin contributions from our North America Welding and Europe Welding segments. This performance more than offset a challenging year-over-year comparison from our Venezuela business," said Christopher Mapes, chairman, president and CEO.
"Looking ahead, improving end market trends and demand for our innovative solutions combined with benefits from our strategic initiatives and accelerated returns, position us well to continue to deliver value to all of our stakeholders," he added.
Business has been so good that Lincoln increased its quarterly dividend from 23 cents per share to 29 cents, or $1.16 per share annually.
Also during the quarrter, the company repurchased nearly 1.9 million shares, at a cash cost of $130.1 million, in effect returning that money to shareholders. Lincoln has targeted stock repurchases of $300 million for the year.
For the first nine months of the year, the company's net income was $179.5 million, or $2.22 per share. Those figures include rationalization and asset impairment charges of $29.9 million and charges of $21.1 million from Venezuelan foreign exchange re-measurement losses related to the adoption of a new foreign exchange mechanism in the first quarter.
This compares with net income of $205.5 million, or $2.47 per share, in 2013.
Sales remained relatively steady at $2.1 billion in the nine months ended September 30, 2014 and the comparable 2013 period, the company said.
Lincoln's executives are discussing the financial report at 10 a.m. Thursday in a teleconference call available to the public live and later as a recording. Click here to access the call or the recording later.