Linde plc today reported second-quarter 2022 income from continuing operations of $372 million and diluted earnings per share of $0.74. Excluding charges primarily from the deconsolidation and impairment of Russian subsidiaries and purchase accounting impacts from the Linde AG merger, adjusted income from continuing operations was $1,566 million, up 11% versus prior year.  Adjusted earnings per share was $3.10, 15% above prior year and 6% higher sequentially.

 

Linde’s sales for the second quarter were $8,457 million, 12% above prior year.  Compared to prior year, underlying sales increased 9%, including 7% price attainment and 2% higher volumes, driven by growth in all end markets except healthcare. Sequentially, underlying sales grew 4% driven by higher price and volume, each growing 2%.

 

Second-quarter operating profit was $589 million.  Adjusted operating profit of $1,988 million was up 8% versus prior year led by higher price, strong volumes and continued productivity initiatives across all segments.  Excluding the effects of cost pass-through, adjusted operating margins expanded 100 basis points versus prior year.

 

Second-quarter operating cash flow of $2,133 million more than covered capital expenditures of $826 million resulting in free cash flow of $1,307 million.  During the quarter, the company returned $2,183 million to shareholders through dividends and stock repurchases, net of issuances.

 

Commenting on the financial results and business outlook, Chief Executive Officer Sanjiv Lamba said, “Linde employees delivered another strong quarter with EPS increasing 15% versus prior year or 20% excluding currency translation.  Furthermore, ROC reached a new record of 20% and operating margins expanded 100 basis points excluding cost-pass through.  Despite the macroeconomic challenges, Linde once again demonstrated its resiliency and the ability to generate shareholder value in any environment.”

 

Lamba continued, “Looking ahead, the geopolitical and macro environment continues to be very uncertain.  Regardless, I have confidence the company will continue to deliver on its commitments to shareholders.”

 

For the third quarter of 2022, Linde expects adjusted diluted earnings per share in the range of $2.85 to $2.95, up 4% to 8% versus prior-year quarter.  This guidance assumes a currency headwind of 6% year-over-year and 3% sequentially. 

 

For the full year 2022, the company expects adjusted diluted earnings per share to be in the range of $11.73 to $11.93, up 10% to 12% versus prior year or 15% to 17% excluding currency headwind.  Note that all Russian earnings are excluded prospectively as of July 1, 2022.  Full-year capital expenditures are expected to be in the range of $3.0 billion to $3.4 billion to support growth and maintenance requirements including the $3.6 billion contractual sale of gas project backlog.

 

Americas sales of $3,518 million grew 16% versus prior-year quarter and 9% sequentially. Compared with second quarter 2021, underlying sales increased 9% driven by 6% higher pricing and 3% higher volume, primarily in the manufacturing, chemicals and energy end markets. Sequentially, underlying sales grew 4%, with pricing and volume each up 2%. Operating profit of $910 million was 25.9% of sales, 290 basis points below prior year or 90 basis points lower when excluding the effects of cost pass-through. 

 

APAC (Asia Pacific) sales of $1,651 million were 7% above prior year and up 3% sequentially. Compared to prior year, underlying sales grew 8% driven by 5% price attainment and 3% volume growth, primarily from project start-ups in the electronics, chemicals and energy end markets. Sequentially, underlying sales grew 6% with pricing up 1% and volume growing 5%. Operating profit of $426 million was 25.8% of sales, 60 basis points above prior year or 160 basis points higher when excluding the effects of cost pass-through. 

 

EMEA (Europe, Middle East & Africa) sales of $2,144 million were up 14% versus prior year and flat sequentially.  Compared with second-quarter 2021, underlying sales grew 11%, led by 12% higher pricing.  Sequentially, underlying sales grew 3% driven by pricing.  Operating profit of $536 million was 25.0% of sales, 100 basis points below prior year or 220 basis points higher when excluding the effects of cost pass-through. 

 

Linde Engineering sales were $644 million, flat versus prior year, and operating profit was $105 million or 16.3% of sales.  Order intake for the quarter was $1,004 million and third-party sale of plant backlog increased to $2.9 billion.