Summary
Linde plc's Q3 2019 results reflect the significant impact of the merger with Praxair, which closed in October 2018. On a reported basis, sales surged by 133% year-over-year, largely driven by the consolidation of Linde AG's operations. While reported earnings per share (EPS) saw a decline due to a higher share count, the company highlights improved performance on a pro forma and adjusted pro forma basis, which aims to provide a more comparable view of operational performance. Adjusted pro forma EPS increased by 26% for the quarter, indicating underlying business strength post-merger. The company continues to navigate merger-related integration and divestitures. Significant progress has been made on merger-related divestitures required by regulatory authorities, with remaining divestitures expected to conclude in late 2019 and 2020. Operational improvements are evident through increased pro forma sales driven by volume and price, and effective cost management, which improved SG&A as a percentage of sales. The company also maintains a substantial backlog of sale of gas projects, signaling future growth opportunities, particularly in the APAC and Americas regions.
Financial Highlights
53 data points| Revenue | $7.00B |
| R&D Expenses | $44.00M |
| SG&A Expenses | $850.00M |
| Operating Income | $1.00B |
| Net Income | $735.00M |
| EPS (Basic) | $1.36 |
| EPS (Diluted) | $1.35 |
| Shares Outstanding (Basic) | 539.75M |
| Shares Outstanding (Diluted) | 543.62M |
Key Highlights
- 1Reported sales increased significantly by 133% to $7,000 million in Q3 2019 due to the business combination with Linde AG. Pro forma sales showed more modest growth of 1% to $6,993 million, indicating normalized growth.
- 2Adjusted pro forma diluted EPS from continuing operations showed a strong increase of 26.0% to $1.94 in Q3 2019, compared to $1.54 in the prior year period, underscoring operational improvements.
- 3The company generated $3,945 million in net cash from operating activities for the first nine months of 2019, a substantial increase of 68% from $2,349 million in the prior year period, driven by merger synergies and improved net income.
- 4Significant progress has been made on merger-related divestitures, with further sales expected to conclude in late 2019 and 2020, which are crucial for regulatory compliance.
- 5The sale of gas project backlog stood at $4.7 billion as of September 30, 2019, representing a key indicator of future sales growth, with a significant portion in APAC and Americas.
- 6Synergies from the merger are beginning to materialize, reflected in improved operating margins on an adjusted pro forma basis and effective cost management, such as reduced SG&A as a percentage of sales.
- 7The company continued its share repurchase program, buying back $3,564 million worth of shares in the third quarter of 2019, demonstrating a commitment to returning capital to shareholders.