Linde Raises 2022 Guidance But Warns of Russia Charges -- Update
April 28 2022 - 7:47AM
Dow Jones News
By Ed Frankl
Linde PLC on Thursday raised its full-year guidance after
first-quarter profit and sales rose on year, despite warning of
potential impairments from its scaling down in the Russian
market.
The multinational industrial-gases and engineering company
raised its full-year guidance for adjusted diluted earnings per
share to between $11.65 and $11.90, representing 9% to 11% annual
growth, 11% to 13% after adjusting for currency effects.
Previously, Linde targeted 2022 adjusted EPS of $11.55 to
$11.85.
The upgraded guidance excludes contribution from Russian
earnings in the second half of the year, as the company scales back
its operations in the country and winds down engineering projects
affected by sanctions, it said.
The company said that it may incur impairment and other charges
in future quarters as it scales back from the market, with any
charges potentially having an adverse effect on Linde's operating
or cash-flow result.
The winding down of projects in Russia, which generated around
1% of sales in 2021, impacted the company by around $350 million in
sales in the first quarter, Linde said.
The company previously said it was halting supply to certain
customers and divesting industrial assets to reduce its footprint
in the country.
As of March 31, Linde had around $2 billion in contract
liabilities related to engineering projects in Russia, it
added.
"Looking ahead, the geopolitical and macro environment has
become more uncertain, but I have confidence the company will
continue to deliver on commitments to shareholders," Chief
Executive Sanjiv Lamba said.
In first-quarter earnings, net profit was $1.17 billion, or
$2.30 a share, up from $980 million, or $1.86 a share, in the
prior-year quarter, the DAX-listed company said.
Linde's adjusted earnings from continuing operations rose 14% to
$1.50 billion, with the equivalent EPS at $2.93 for the three-month
period, up 18% from the previous year's first quarter.
Earnings growth was led by higher pricing, strong volumes and
continued productivity initiatives across all segments, the company
said.
Sales rose 13% to $8.21 billion, with revenue in the Americas
business, which generates most of Linde's sales, up 14%, the
company said.
The results compare with expectations of $1.27 billion for net
profit and $7.40 billion for sales, according to analysts polled by
FactSet.
Sales were up slightly compared with the final quarter of 2021,
as Linde took advantage of higher pricing, offsetting seasonally
lower volumes.
Shares in Frankfurt trade 1.1% lower at EUR288.30.
Write to Ed Frankl at edward.frankl@dowjones.com
(END) Dow Jones Newswires
April 28, 2022 07:32 ET (11:32 GMT)
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