Industrial gases giant Linde has delivered record quarterly sales and adjusted earnings in the third quarter of 2026, powered by stronger pricing, higher volumes and sustained demand across key industrial markets, even as reported net income declined 12% from a year earlier.
The company reported third-quarter net income of $1.692 billion, down 12%, while diluted earnings per share fell 11% to $3.66. However, excluding Linde AG purchase accounting impacts, its cost reduction programme and other charges, adjusted net income rose 7% to $2.122 billion. Adjusted diluted earnings per share climbed 9% to a record $4.59.
Quarterly sales surged 9% year-on-year to a record $9.404 billion, including a 1% favourable currency impact. Underlying sales growth stood at 5%, driven by 3% higher pricing and a 2% increase in volumes. Electronics, chemicals and energy, and manufacturing were among the key growth drivers.
Chief Executive Officer Sanjiv Lamba said the company continued to strengthen its financial performance while maintaining its focus on operational efficiency and shareholder returns.
“Linde’s financial performance continued to improve in the third quarter, with record sales of $9.4 billion and record EPS of $4.59, alongside strong operating cash flow of $3.2 billion. During the quarter we took further actions to improve productivity and strengthen performance across our businesses, while maintaining our goal to deliver industry-leading results.”
Linde generated $3.169 billion in operating cash flow during the quarter, an 8% increase over the previous year. After capital expenditure of $1.392 billion, free cash flow stood at $1.777 billion.
The company returned $1.685 billion to shareholders through dividends and share repurchases, net of issuances, underscoring its continued commitment to capital discipline and shareholder value.
Adjusted operating profit rose 8% to $2.763 billion, translating into an adjusted operating margin of 29.4%. Reported operating profit was $2.150 billion. Operating margin declined 30 basis points year-on-year, although it remained flat after excluding the impact of cost pass-through.
Lamba said customer demand remained encouraging, particularly in the electronics sector, adding that the company's project pipeline continued to support its growth outlook.
“Customer proposal activity remains robust, particularly across electronics, supporting our confidence in continued backlog growth. Regardless of the economic environment, we remain focused on operational excellence, disciplined capital deployment and securing high-quality projects that will compound shareholder value over the long term.”
The Americas emerged as a major contributor to Linde's quarterly growth, with sales climbing 11% to $3.601 billion. Underlying sales increased 9%, supported by 6% higher pricing and 3% volume growth, particularly across electronics, chemicals and energy, and metals and mining.
Operating profit reached $1.263 billion, representing 35.1% of sales, up 50 basis points from the year-earlier period.
Asia Pacific (APAC) recorded sales of $1.950 billion, up 12% year-on-year. Underlying sales increased 8%, driven by 3% higher pricing and 5% volume growth. Electronics, chemicals and energy, and project start-ups supported the region's performance.
Operating profit stood at $534 million, equivalent to 27.4% of sales. The operating margin declined 70 basis points year-on-year, narrowing to 40 basis points after excluding cost pass-through effects.
In Europe, the Middle East and Africa (EMEA), sales rose 7% to $2.327 billion, while underlying sales grew 3%, supported by 2% higher pricing and 1% volume growth. Healthcare and food and beverage markets were the primary contributors.
Operating profit reached $817 million, with a margin of 35.1%. The margin was down 80 basis points from the previous year but remained flat after adjusting for cost pass-through.
Linde Engineering reported third-quarter sales of $582 million, an increase of 12% year-on-year. Operating profit came in at $107 million, representing 18.4% of sales.
Order intake for the quarter stood at $499 million, while its third-party equipment sales backlog reached $2.9 billion.
Looking ahead, Linde expects adjusted diluted earnings per share of $4.40-$4.50 in the fourth quarter of 2026, representing growth of 5%-7% over the corresponding period last year. The company does not anticipate any foreign currency translation impact during the quarter.
For the full year, Linde expects adjusted diluted earnings per share of $17.82-$17.92, representing an increase of 8%-9%, assuming a favourable currency impact of 2% compared with the previous year.
Capital expenditure for 2026 is projected at $5.5 billion-$6 billion, supporting both growth and maintenance requirements, including its $7.9 billion contractual sale-of-gas project backlog.
