Flat sales, strong profits: Linde shows its defensive strength in Q1

ByInvestment Club

Overview

Linde delivered solid first-quarter performance in 2025 despite flat headline sales, as the company expanded margins, grew earnings, and maintained industry-leading returns.

CEO Sanjiv Lamba commented: “While first quarter macroeconomic headwinds largely played out as anticipated, Linde employees delivered another resilient performance by expanding operating margins 120 basis points to 30.1%, growing EPS (excluding FX) by 8%, and maintaining industry leading return on capital of 25.7%. These results were achieved through disciplined capital allocation and proactive management actions. Looking forward, while we remain cautious on the economic outlook, I’m confident the Linde business model can continue to create shareholder value in any environment.”

Q1 2025 vs. Q1 2024:

  • Sales recorded a value of $8.11bn (flat YoY), with underlying sales which grew +1% YoY, supported by +2% pricing, offset by -1% volume decline in manufacturing and metals & mining sectors.
    • Americas sales increased to $3.67bn (+3% YoY), while operating margin was 31.0% (+40bps YoY), a growth led by electronics and chemicals & energy.
    • EMEA sales declined to $2.03bn (-3% YoY), while operating margin was 35.5% (+260bps YoY), with price gains offset volume weakness in metals & energy.
    • APAC sales also decreased to $1.54bn (-3% YoY), while operating margin was 29.3% (+120bps YoY), with volume softness from metals & mining drag.
    • Linde Engineering sales were $565m (+5% YoY), while operating margin was 20.2%, with order intake for the quarter of $516m and third-party sale of equipment backlog of $3.3bn.
  • Adjusted operating profit grew to $2.44bn (+4% YoY), led by higher price and continued productivity initiatives across all segments.
  • Adjusted operating margin rose to 30.1% (+120bps YoY), reflecting productivity gains and pricing execution.
  • GAAP net income was $1.67bn (+3% YoY), while adjusted net income also increased to $1.88bn (+3% YoY).
  • Adjusted EPS increased to $3.95 (+5% YoY, +8% ex-FX), boosted by stronger margins and disciplined cost control.
  • Operating cash flow was $2.16bn (+11% YoY), driven by working capital improvements and earnings growth, while free Cash Flow was $891m after $1.27bn in CapEx.
  • In Q1 2025, Linde returned $1.81bn to shareholders through dividends and share repurchases, net of issuances.
  • The company raised its quarterly dividend to $1.50/share and maintained strong free cash flow and liquidity to fund growth projects and shareholder distributions.

Linde reaffirmed its full-year 2025 adjusted EPS guidance of $16.20-$16.50, implying 4%-6% growth YoY, or 6%-8% growth excluding FX impacts. Q2 adjusted EPS is expected to range between $3.95 and $4.05, up 3%-5% YoY (or 5%-7% ex-FX). Full-year CapEx is projected at $5.0bn-$5.5bn, supporting long-term growth, including execution of its $7.0bn sale-of-gas project backlog.

The quarterly results report did not bring such significant movements on the market, with LIN’s share price increasing by approximately +1.5% on the day after the report was published, and thus the stock price managed to approach the 50-day moving average, which it even slightly exceeded towards the end of the trading session, something that has not happened at all since the drastic collapse at the beginning of April, when the price seems to have entered a bear market area. However, the price seems to have recovered quite quickly over the last month, and since the beginning of this year, it has appreciated by almost +10%.

Source: TradingView

Author: Ionuț-Adrian Lazar

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