01—Abstract
Summary
Summary of the 10-Q filed May 1, 2026. Cited figures are marked; the original filing is the authoritative source.
Linde plc's first-quarter 2026 10-Q shows continued top-line and profit growth, helped substantially by currency.
Reported sales rose 8% to $8,781 milliona, with currency contributing 5 points, price 2 points, volume 1 point and acquisitions 1 point; Engineering sales fell 1%. Reported operating profit increased 12% to $2,439 million (27.8% margin), while adjusted operating profit (excluding Linde AG merger purchase accounting) rose 8% to $2,630 million, a 30.0% margin, slightly below the prior year's 30.1%. Reported diluted EPS was $3.98, up 13%, and adjusted diluted EPS was $4.33, up 10%.
Note that the prior-year quarter included $55 millionb of cost reduction charges, which flatters the reported growth comparison, and the reported Q1 2026 results include a gain on an Americas divestiture within other income. Cash generation remained solid, with operating cash flow of $2,240 million (up 4%) covering capital expenditures of $1,342 million (up $72 million, tied to backlog-driven plant investment) and dividends of $741 million. Free cash flow after capex and dividends was roughly $157 million, and Linde spent $804 million on net share repurchases, leaving $6.5 billion authorized under the 2023 program.
Net debt is modest relative to earnings: total debt was $26.3 billionc against $3.96 billion of cash, down from $27.0 billion at year-end, and the company repaid $725 million of maturing notes. Short-term commercial paper rose to $4.5 billion, and the company retains $6.5 billion of undrawn revolving credit facilities. Investors should keep an eye on the contingent liabilities tied to the Russian gas processing and LNG projects (a $1.1 billion contingent liability, a $1.9 billion total of recorded liabilities for the Russia matters, and a $0.8 billion Amur GPP contingent liability), as well as the Brazil tax dispute and German appraisal litigation.
Management does not expect these to have a material adverse effect on financial position or liquidity, but timing and outcomes are uncertain. Remaining performance obligations total about $64 billiond, supporting visibility into future revenue.
02—Key points
Key Highlights
- Reported sales increased 8% to $8,781 million; currency added 5 points, price/mix 2 points, volume 1 point, and acquisitions 1 point, while Engineering sales declined 1%.
- Reported operating profit rose 12% to $2,439 million (27.8% margin); adjusted operating profit rose 8% to $2,630 million, with the adjusted margin of 30.0% down slightly from 30.1%.
- Diluted EPS of $3.98 rose 13% (adjusted $4.33, up 10%), helped by higher net income and a 2% lower diluted share count.
- Operating cash flow of $2,240 million (up 4%) funded $1,342 million of capex, $741 million of dividends, and $804 million of net share buybacks; the quarterly dividend rose 7% to $1.60 per share.
- Total debt declined to $26.3 billion from $27.0 billion after repaying $725 million of notes; cash fell to $3.96 billion and the balance sheet remains supported by $6.5 billion of undrawn revolvers.
- Reported results include a gain on an Americas divestiture within other income of $63 million, which flatters the reported quarter relative to the adjusted results.
- Material legal exposures remain: Russia-related contingent liabilities ($1.1 billion RCA contract matter and $0.8 billion Amur GPP matter), with management not expecting a material adverse effect.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 1, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $8.78B$8.11B | +8.2% |
| R&D Expenses | $38.00M$38.00M | 0.0% |
| SG&A Expenses | $893.00M$786.00M | +13.6% |
| Operating Income | $2.44B$2.18B | +11.7% |
| Net Income | $1.86B$1.67B | +11.0% |
| EPS (Basic) | $4.00$3.53 | +13.3% |
| EPS (Diluted) | $3.98$3.51 | +13.4% |
| Shares Outstanding (Basic) | 464.05M473.30M | −2.0% |
| Shares Outstanding (Diluted) | 466.32M476.26M | −2.1% |
05—Questions
Frequently Asked Questions
How much of Linde's sales growth in Q1 2026 came from currency versus underlying business performance?
Currency translation contributed about 5 of the 8 percentage points of sales growth, driven mainly by a stronger euro against the dollar. Underlying growth was about 3 points: price/mix added 2 points, volume added 1 point, and acquisitions added 1 point, partly offset by a 1-point drag from Engineering sales. Cost pass-through was flat.
Why did reported operating profit grow faster than adjusted operating profit?
Reported operating profit grew 12% to $2,439 million, while adjusted operating profit grew 8% to $2,630 million. The difference reflects the prior-year $55 million cost reduction charge that did not recur, which boosts reported growth, and the exclusion of merger-related purchase accounting amortization, which is a non-cash item that affects both periods. The reported quarter also benefited from a divestiture gain included in other income.
Is Linde's dividend and share buyback program still well supported by cash flow?
Operating cash flow of $2,240 million covered capex of $1,342 million, dividends of $741 million, and net share repurchases of $804 million in the quarter, though those three uses together exceeded operating cash flow by roughly $650 million. The gap was funded by debt and existing cash, and the company's cash balance fell from $5.06 billion to $3.96 billion over the quarter. Investors should watch whether this pattern persists, since $6.5 billion of buyback authorization remains.
What are the largest legal or contingent risks disclosed in the filing?
The most significant items are the Russia-related disputes with RCA, where Linde reports a $1.1 billion contingent liability tied to terminated engineering projects and a combined $1.9 billion of recorded liabilities for the Russia matters, along with about €0.8 billion of German guarantor bank reimbursement claims. The Amur GPP matter carries a $0.8 billion contingent liability. Other items include a Brazilian tax dispute and German Linde AG appraisal litigation with no reserve. Management states these are not expected to have a material adverse effect on financial position or liquidity, but timing and outcomes could meaningfully affect reported results in any period.
How is Linde's debt position and liquidity profile?
Total debt was $26.3 billion at March 31, 2026, down from $27.0 billion at year-end, after repaying $725 million of 3.20% notes. Short-term debt, mainly commercial paper, rose to $4.8 billion. The company has $6.5 billion of undrawn revolving credit facilities expiring in 2026 and 2027 with no financial maintenance covenants. The weighted average short-term borrowing rate was 3.0%, and the fair value of long-term debt ($19.8 billion) was below its carrying value ($21.5 billion).
06—Continue